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Corporate Case Study | June 13, 2026
In 2004, three bankers who had built India’s branch of a Dutch agricultural lender used the proceeds of selling that business to start a new private bank with a single ambition stated in its own mission: to build the finest quality large bank of the world in India. Sixteen years later, on March 5, 2020, the Reserve Bank of India placed that same bank, Yes Bank, under a moratorium, capped withdrawals at Rs 50,000 per depositor, and within days arrested its founder. What followed was one of the most consequential rescue operations in Indian banking history: a State Bank of India led reconstruction, a Rs 8,415 crore write down of investor capital that is still being litigated in the Supreme Court six years later, a Rs 48,000 crore bad loan transfer to a dedicated asset reconstruction company, and, in September 2025, the largest cross border investment ever made into an Indian private bank, when Japan’s Sumitomo Mitsui Banking Corporation acquired a 20% stake. This article traces that full arc, from founding to near collapse to the bank’s current position as a foreign owned, recovering mid sized private lender.
Table of Contents
- Part I: From Rabo India Finance to Yes Bank (1997 to 2008) Three bankers, a Dutch joint venture, and the founding of a new private bank
- Part II: Yes Bank 2.0 and the Aggressive Growth Years (2009 to 2018) The death of Ashok Kapur, the BHAG targets, and the corporate lending concentration that built the bank and later broke it
- Part III: The Collapse (2018 to March 2020) Asset quality divergence, credit rating downgrades, the deposit run, and the March 5 moratorium
- Part IV: The Reconstruction Scheme and the AT1 Bond Controversy SBI’s Rs 7,250 crore rescue, the Rs 8,415 crore write down, and a legal battle still before the Supreme Court
- Part V: The Turnaround (2020 to 2024) The JC Flowers asset transfer, the Carlyle and Advent capital raise, and the slow climb back to profitability
- Part VI: SMBC’s 2025 Acquisition: India’s Largest Cross Border Banking Deal A 20% stake for Rs 13,482 crore, SBI’s exit from majority control, and what changes under Japanese ownership
- Part VII: Yes Bank Today: FY2026 Financials and Current Position Revenue, profit, asset quality, and the leadership transition to Vinay Tonse
- Frequently Asked Questions
Mar 5, 2020
Date the RBI placed Yes Bank under a moratorium, capping withdrawals at Rs 50,000 per depositor and superseding the bank’s board.
Rs 8,415 cr
Value of Additional Tier 1 bonds written down to zero under the reconstruction scheme, a decision still contested in the Supreme Court as of 2026.
Rs 13,482 cr
Amount Japan’s SMBC paid in September 2025 for a 20% stake from SBI and seven other banks, becoming Yes Bank’s largest shareholder.
1.3% / 0.2%
Gross and net NPA ratios as of Q4 FY2026, the lowest since before the moratorium, down from peaks above 17% gross NPA in FY2020.
Part IFrom Rabo India Finance to Yes Bank (1997 to 2008)
Three Bankers and a Dutch Partnership
The origins of Yes Bank trace back to 1995, when a team from Rabobank, the Netherlands based cooperative bank with deep expertise in agricultural and food sector financing, visited India scouting for opportunities. Rana Kapoor, who had previously worked at Bank of America and ANZ Grindlays Investment Bank, along with his brother in law Ashok Kapur and a third banker, Harkirat Singh, proposed two joint ventures to Rabobank: a non banking financial company and, eventually, a bank. In 1997, the three Indian partners and Rabobank set up Rabo India Finance as the NBFC venture, with the Indian partners contributing equity capital of approximately Rs 90 million.
By 2003, the three partners had sold their stakes in Rabo India Finance and used the proceeds, an initial equity capital reported at approximately Rs 460 million, to apply for a full banking licence from the Reserve Bank of India. Yes Bank Limited was incorporated in Mumbai on November 21, 2003. Harkirat Singh departed from the venture before the bank’s launch due to disagreements over leadership. The RBI granted the banking licence in May 2004, and Yes Bank commenced operations the same year, opening its first branch in Mumbai in August 2004. At founding, Rana Kapoor and Ashok Kapur each held approximately 26% of the bank, with Rabobank International holding approximately 20% and the remainder distributed among other investors and directors.
The founding mission and the early focus on corporate banking: Yes Bank’s stated mission from the outset was to build the finest quality large bank of the world in India, with a strategy built around what the founders called knowledge banking, technology enabled services, and a focus on corporate and institutional clients rather than retail deposits in its early years. Rana Kapoor served as Managing Director and Chief Executive Officer from the bank’s founding, while Ashok Kapur, who had previously been Chairman of ANZ Grindlays in India, served as Chairman. The two founders were known for contrasting approaches: Kapur favoured a more conservative lending style, while Kapoor was associated with a more aggressive, growth oriented approach. This internal tension would become significant after 2008.
The 26/11 Attacks and a Turning Point in Leadership
On November 26, 2008, Ashok Kapur was killed during the terrorist attacks on Mumbai, having been at the Trident hotel at the time. His death removed the co-founder whose more conservative lending instincts had partly balanced Rana Kapoor’s growth orientation within the bank’s leadership. Following Kapur’s death, his shareholding passed to his family, and Rana Kapoor’s influence over the bank’s strategic direction became more pronounced in the years that followed, a shift that several retrospective analyses have linked to the more aggressive corporate lending growth that characterised the bank’s next decade.
Part IIYes Bank 2.0 and the Aggressive Growth Years (2009 to 2018)
The BHAG Targets
Around 2011, Yes Bank articulated a five year strategic plan internally referred to as Yes Bank 2.0, built around what the bank’s own materials described as a Big Hairy Audacious Goal, or BHAG, for the period 2011 to 2015. The targets included compounding the balance sheet at 33% annually, deposits at 36%, loans at 30%, and the current account and savings account, or CASA, deposit base at 30%. The plan’s explicit targets for 2015 included 900 branches, 2,000 ATMs, a deposit base of Rs 125,000 crore, and a balance sheet of Rs 150,000 crore. By the end of 2015, the bank had reached 860 branches and approximately 1,600 ATMs, a deposit base of Rs 111,720 crore, and a balance sheet of approximately Rs 100,000 crore, broadly close to but somewhat below the most ambitious targets, while still representing extremely rapid growth by the standards of Indian private banking at the time.
This growth was achieved substantially through aggressive corporate lending, particularly to large infrastructure, real estate, and conglomerate groups that were simultaneously borrowing heavily from multiple lenders during India’s 2010s credit boom. Yes Bank built significant exposure to corporate groups that would later become some of the most prominent stressed asset cases in Indian banking, including entities linked to Infrastructure Leasing and Financial Services (IL&FS), Dewan Housing Finance Corporation (DHFL), the Anil Ambani led Reliance Group companies, and other large borrowers whose financial difficulties became public between 2018 and 2020. Throughout much of this period, Yes Bank’s reported asset quality metrics, including its gross non performing asset ratio, remained relatively favourable compared to public sector banks, a fact that in retrospect was inconsistent with the underlying risk in its loan book.
How the bank’s reported numbers diverged from reality: The RBI conducts periodic Annual Risk Based Supervision exercises and, where a bank’s own reported non performing asset figures differ materially from the RBI’s assessment, requires the bank to disclose this divergence. Yes Bank disclosed significant divergences between its reported and RBI assessed asset quality in successive years from 2017 onward. A bank’s reported gross NPA ratio going from a relatively low single digit figure to double digits within one or two reporting cycles, as happened with Yes Bank, is one of the clearest warning signs that a bank’s internal asset classification has not kept pace with the actual credit quality of its book, often because exposures to large stressed groups were classified as standard for longer than the underlying repayment behaviour justified.
Part IIIThe Collapse (2018 to March 2020)
The Share Price Crash and Capital Crisis
Yes Bank’s share price reached its all time high in August 2018. Over the following twelve months, as the scale of the bank’s exposure to stressed corporate groups including IL&FS and DHFL became apparent following those groups’ own defaults in 2018, and as the RBI’s divergence findings became public, the stock fell approximately 78% from its peak by July 2019. Rana Kapoor’s personal stake in the bank, which had made him a billionaire by 2017, fell in value correspondingly, with his net worth reported at approximately 377 million US dollars by mid 2019, down from over a billion dollars.
Through late 2019 and early 2020, Yes Bank’s attempts to raise fresh capital from external investors repeatedly fell through, while its capital adequacy ratio deteriorated toward levels that raised concerns about the bank’s ongoing viability. Credit rating agencies downgraded the bank’s instruments multiple times during this period. Depositors, particularly large corporate and institutional depositors who monitor bank credit ratings closely, began withdrawing funds, creating a deposit run that further strained the bank’s liquidity position in the weeks before the RBI’s intervention.
March 5, 2020: The Moratorium
On March 5, 2020, the RBI placed Yes Bank under a moratorium under the Banking Regulation Act, superseding the bank’s board of directors and appointing an administrator. The moratorium capped withdrawals at Rs 50,000 per depositor across all accounts, with limited exceptions for emergencies such as medical expenses, education fees, and marriages. RBI Governor Shaktikanta Das stated publicly that depositors’ interests would be fully protected and that the moratorium, set at an outer limit of 30 days, would be lifted well before that as a rescue plan was finalised. Three days later, on March 8, 2020, Rana Kapoor was arrested by India’s Enforcement Directorate in connection with investigations into the bank’s lending practices and alleged quid pro quo arrangements with borrowers.
Why a moratorium was necessary and what it actually does: A banking moratorium under Section 45 of the Banking Regulation Act is an emergency measure that temporarily restricts a bank’s normal operations, most visibly by capping how much depositors can withdraw, while a rescue or resolution plan is put in place. The purpose is to prevent a disorderly run on the bank’s remaining liquidity while regulators and potential investors arrange an orderly recapitalisation. It is a tool used only when a bank’s situation has become severe enough that normal supervisory measures are no longer sufficient. The RBI’s emphasis on the 30 day outer limit, and its insistence on having SBI lead a rescue consortium rather than relying on RBI’s own emergency liquidity support alone, reflected an effort to resolve the situation quickly enough to avoid a broader loss of confidence in the private banking sector.
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1995 to 1997Rabo India Finance established
Rana Kapoor, Ashok Kapur, and Harkirat Singh partner with Rabobank of the Netherlands to form an NBFC, the precursor venture that funds Yes Bank’s founding.
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Nov 21, 2003Yes Bank Limited incorporated in Mumbai
Following the sale of their Rabo India Finance stakes, Kapoor and Kapur incorporate Yes Bank with initial equity of approximately Rs 460 million.
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May 2004RBI grants banking licence; operations begin
Yes Bank receives its licence and opens its first branch in Mumbai in August 2004. Kapoor and Kapur each hold 26%, with Rabobank International holding 20%.
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Nov 26, 2008Ashok Kapur killed in the 26/11 Mumbai attacks
Kapur’s death at the Trident hotel removes the co-founder whose conservative lending instincts had balanced Kapoor’s growth orientation. His shareholding passes to his family.
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2011 to 2015Yes Bank 2.0 and the BHAG targets
The bank pursues a five year plan targeting 33% balance sheet CAGR. By 2015 it reaches 860 branches and a Rs 111,720 crore deposit base, growth substantially financed by large corporate lending.
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2017 to 2018RBI divergence reports surface
RBI’s annual supervision finds Yes Bank’s reported NPA figures materially understate actual asset quality, driven by exposures to IL&FS, DHFL, and other large stressed corporate groups.
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Aug 2018Yes Bank share price reaches all time high
The stock subsequently falls approximately 78% over the following twelve months as the scale of stressed exposures becomes public.
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2019Capital raise attempts fail; deposit run begins
Multiple attempts to raise external capital collapse. Credit rating downgrades accelerate withdrawals by large depositors, straining liquidity heading into 2020.
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Mar 5, 2020RBI imposes moratorium; withdrawals capped at Rs 50,000
The bank’s board is superseded and an administrator appointed. RBI states depositor interests will be fully protected and the moratorium will be lifted within 30 days.
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Mar 8, 2020Rana Kapoor arrested by the Enforcement Directorate
The founder is arrested in connection with investigations into the bank’s lending practices and alleged arrangements with borrowers.
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Mar 13, 2020Union Cabinet approves the reconstruction scheme
SBI agrees to invest Rs 7,250 crore for a stake of up to 49%, with seven other banks investing smaller amounts. Two tranches of AT1 bonds worth Rs 8,415 crore are written down to zero.
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Mar 18, 2020Moratorium lifted; normal banking resumes
Yes Bank resumes full services. Prashant Kumar, formerly CFO of SBI, takes over as Administrator and subsequently as Managing Director and CEO.
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Jul 2020Rs 14,870 crore follow-on public offer
Yes Bank raises capital through an FPO at Rs 12 to 13 per share. SBI participates, but the broader share issuance reduces SBI’s stake from approximately 48.2% to approximately 30% by March 2021.
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2022JC Flowers ARC deal and Carlyle / Advent capital raise
Yes Bank transfers a large stressed loan portfolio to a dedicated asset reconstruction company and raises approximately 1.1 billion US dollars from private equity investors Carlyle Group and Advent International.
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Jan 2023Bombay High Court quashes the AT1 write down
The court rules the administrator exceeded his authority and that the March 2020 reconstruction scheme did not explicitly permit the write down. The government, RBI, and Yes Bank appeal.
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Mar 2023Supreme Court stays the High Court order
The AT1 bond dispute moves to the Supreme Court, where hearings continue into 2025 and 2026 without final resolution as of mid 2026.
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Sep 18, 2025SMBC completes acquisition of a 20% stake
Japan’s Sumitomo Mitsui Banking Corporation pays Rs 13,482 crore for shares sold by SBI (13.18%) and seven other banks (approximately 7% combined), becoming Yes Bank’s largest shareholder.
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FY2026Leadership transition to Vinay Tonse
Vinay M. Tonse succeeds Prashant Kumar as Managing Director and CEO. Q4 FY2026 results show gross NPA at 1.3% and net NPA at 0.2%, the lowest since before the moratorium.
Part IVThe Reconstruction Scheme and the AT1 Bond Controversy
How the Rescue Was Structured
The Yes Bank Limited Reconstruction Scheme, 2020 came into effect on March 13, 2020, following Union Cabinet approval based on a plan proposed by the RBI. Under the scheme, the State Bank of India invested Rs 7,250 crore by acquiring 725 crore equity shares at Rs 10 each, taking a stake of approximately 49%, of which 26 percentage points were subject to a three year lock-in. Seven other banks, namely HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, IDFC First Bank, Federal Bank, and Bandhan Bank, also invested smaller amounts, acquiring stakes ranging from approximately 1% to 6% each, with 75% of each of their holdings subject to the same three year lock-in. SBI’s leadership had initially resisted the RBI’s preferred approach of routing emergency liquidity support through SBI alone, citing the inability to shoulder such a large responsibility on its own, which led to the broader consortium structure that was ultimately adopted.
Prashant Kumar, who had served as Chief Financial Officer of SBI, was appointed as the administrator of Yes Bank during the moratorium and subsequently became the bank’s Managing Director and Chief Executive Officer, a role he held through the bank’s recovery period until the FY2026 leadership transition to Vinay Tonse.
The AT1 Bond Write Down: A Six Year Legal Saga
The most legally contentious element of the reconstruction was the treatment of Yes Bank’s Additional Tier 1, or AT1, bonds. AT1 bonds are perpetual, unsecured instruments that banks issue to count toward their core capital under Basel III norms, and by design they can be written down or converted to equity if a bank’s capital falls below specified thresholds, since their purpose is precisely to absorb losses in a crisis before depositors or senior creditors are affected. As part of the reconstruction, the administrator wrote down two tranches of Yes Bank’s AT1 bonds, worth approximately Rs 3,000 crore and Rs 5,415 crore respectively, for a combined Rs 8,415 crore, reducing their value to zero. Equity shareholders, by contrast, did not face an equivalent write down, though 75% of the shares held by the rescuing banks were locked in for three years as described above.
The accordion below traces the legal dispute that followed, which remains unresolved as of mid 2026.
Phase 1: The Write Down and Initial Challenges (2020) Mar 2020
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On March 14, 2020, the administrator wrote down the two AT1 bond tranches worth Rs 3,000 crore and Rs 5,415 crore to zero. Bondholders, including mutual funds, insurance companies, and individual retail investors who had purchased these instruments believing them to be relatively safe, yield bearing investments, found their holdings reduced to nothing overnight. Starting in 2020, affected bondholders filed writ petitions, civil suits, and criminal and consumer complaints across multiple courts in India, arguing that the write down was procedurally improper.
Phase 2: The Bondholders’ Core Argument Legal Basis
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The bondholders’ central argument was that the Yes Bank Limited Reconstruction Scheme, 2020, as notified by the government on March 13, 2020, did not explicitly authorise a write down of the AT1 bonds, and that the administrator therefore exceeded his statutory authority by ordering the write down the following day, after the reconstruction scheme had already taken effect. A separate contractual argument centred on the terms of the original AT1 bond offer documents, including one issued by the bank on December 31, 2013, which stated that all AT1 bonds issued by the bank, present and future, would rank pari passu among themselves and would be written down on a pari passu basis. Bondholders argued that the administrator’s write down of only two specific tranches, rather than all outstanding AT1 bonds proportionally, breached this pari passu commitment.
Phase 3: Bombay High Court Quashes the Write Down (January 2023) Jan 2023
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In January 2023, the Bombay High Court ruled in favour of the bondholders, quashing the administrator’s decision. The court held that the final reconstruction scheme notified on March 13, 2020 did not explicitly authorise the write down, and that the administrator had exceeded his powers by ordering it after the scheme had already come into force. This ruling, covering a batch of writ petitions including both institutional and individual investor petitions, was widely seen as a significant precedent given that Indian banks collectively had over Rs 1 lakh crore of AT1 bonds outstanding at the time, and a ruling against the write down’s validity raised questions about the enforceability of loss absorption clauses in AT1 instruments more broadly.
Phase 4: Supreme Court Stay and Ongoing Hearings (2023 to 2026) Ongoing
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Yes Bank, the RBI, the central government, and SBI appealed the Bombay High Court’s ruling to the Supreme Court, which stayed the High Court order in March 2023. Hearings continued through 2025, with the Centre, represented by the Solicitor General, defending the write down before the Supreme Court on the basis that it was necessary to protect depositors and ensure the bank’s survival, and that the decision was consistent with the design of AT1 instruments as loss absorbing capital under Basel III. The government also placed before the court the Cabinet Resolution and related minutes from March 2020, after the Supreme Court asked for these documents. The Centre argued that SBI had infused close to Rs 8,000 crore into Yes Bank with the explicit understanding that the AT1 bonds would be written down, and warned that disallowing the write down after the fact could create systemic risk given that banks collectively have issued over Rs 1 lakh crore in AT1 bonds. As of the most recent hearings, the Supreme Court has indicated it intends to conclude arguments, though a final verdict had not been issued as of mid 2026, with the matter remaining one of the most closely watched banking law cases in India.
Part VThe Turnaround (2020 to 2024)
Cleaning the Balance Sheet: The JC Flowers ARC Transfer
A central part of Yes Bank’s post reconstruction strategy was removing legacy stressed assets from its own balance sheet so that management attention and capital could be redirected toward new, better quality lending rather than continuing to manage a large pool of bad loans inherited from the pre-2020 era. In 2022, Yes Bank transferred a large portfolio of stressed loans, with a gross value reported at approximately Rs 48,000 crore, to JC Flowers Asset Reconstruction Private Limited, a dedicated asset reconstruction company. In exchange, Yes Bank received security receipts representing its residual economic interest in the recoveries from these assets over time.
Alongside this transfer, Yes Bank raised fresh capital of approximately 1.1 billion US dollars through a preferential allotment to private equity investors Carlyle Group and Advent International in 2022, capital that strengthened the bank’s core equity base and supported its transition toward growth oriented lending rather than legacy asset management. Over the following years, the bank steadily worked down the value of these security receipts through recoveries and resolutions, and by Q4 FY2025, management reported that the net carrying value of security receipts on the bank’s books had been brought down to nil, effectively completing the cleanup of the pre-reconstruction stressed asset legacy.
Asset Quality Recovery: Gross and Net NPA Ratios (FY2020 to FY2026)
Approximate gross and net non performing asset ratios at fiscal year end, illustrating the multi-year cleanup following the 2020 reconstruction and the 2022 JC Flowers transfer. Source: Yes Bank quarterly results presentations.
The Quarter by Quarter Climb in Profitability
Yes Bank’s return to sustained profitability was gradual rather than immediate. Net profit after tax grew from Rs 502 crore in Q1 FY2025 to approximately Rs 738 crore in Q4 FY2025, an improvement management described as consistent quarter on quarter progress with no blips in profitability across the period. The bank’s return on assets reached 0.7% by Q4 FY2025, and management publicly stated an aspiration to exit Q4 FY2026 with a return on assets of 1%, a level considered healthy for an Indian private bank.
Into FY2026, net profit reached Rs 801 crore in Q1, representing 59.4% year on year growth, before easing to Rs 654.47 crore in Q2 FY2026, still 18.3% higher than the year-ago quarter, and then rising to Rs 1,068 crore in Q4 FY2026, a 44.7% year on year increase. Across this period, the CASA ratio, a measure of the proportion of a bank’s deposits held in low cost current and savings accounts, improved from approximately 29.4% in Q2 FY2024 to 35.1% in Q4 FY2026, reflecting both a recovering depositor base and the bank’s efforts to reduce its cost of funds.
Quarterly Net Profit After Tax (Q1 FY2025 to Q4 FY2026)
All figures in Rs crore. Source: Yes Bank quarterly results filed with BSE and NSE.
Part VISMBC’s 2025 Acquisition: India’s Largest Cross Border Banking Deal
The Deal Structure
In May 2025, Sumitomo Mitsui Banking Corporation, a wholly owned subsidiary of Japan’s Sumitomo Mitsui Financial Group, agreed to acquire a 20% stake in Yes Bank through a secondary purchase of shares from existing shareholders, primarily SBI and the seven other banks that had participated in the 2020 reconstruction. The agreed price was Rs 21.50 per share, an approximately 18% premium to Yes Bank’s closing share price at the time the deal was announced. The transaction required approval from both the RBI and the Competition Commission of India, which were granted on August 22 and September 2, 2025 respectively.
The transaction completed on September 18, 2025. SBI sold approximately 13.18% of its 23.97% holding for over Rs 8,889 crore, reducing its stake to approximately 10.8%, while the remaining approximately 7% was sold by the consortium of seven other reconstruction-era investor banks, including Bandhan Bank, which reduced its holding from 0.70% to 0.21% as part of the transaction. The total consideration paid by SMBC across the combined transaction was approximately Rs 13,482 crore. The deal was described by Yes Bank as the single largest cross border investment in the Indian banking sector to date, and SMBC has subsequently received RBI approval to potentially increase its stake up to 24.99%, with its holding reported at approximately 24.2% shortly after completion.
Board Representation and Strategic Intent
Following the completion of the transaction, two SMBC nominee directors, Shinichiro Nishino, Executive Officer and Head of Global Credit in SMBC’s risk management unit based in Tokyo, and Rajeev Veeravalli Kannan, Managing Executive Officer and Head of the India Division at SMBC and SMFG, joined Yes Bank’s board as non-executive, non-independent directors with effect from September 18, 2025. Sandeep Tewari, the nominee director representing SBI, ceased to be a board member as part of the transition, though SBI retained one of its two prior board seats with its reduced shareholding.
Yes Bank’s management stated that the bank intends to use SMBC’s global network to strengthen corporate banking, treasury operations, and cross border financial services, particularly in trade and financial flows between Japan and India. SBI’s chairman described the original 2020 restructuring as an innovative, first of its kind public sector and private sector partnership, and welcomed SMBC as a strategic partner for the bank’s next phase.
What the SMBC deal represents structurally: The SMBC transaction marks the formal end of the public sector rescue phase of Yes Bank’s story. SBI’s role, which began in March 2020 as that of a majority shareholder and de facto controlling rescuer, has been reduced to that of a meaningful but no longer dominant minority shareholder at approximately 10.8%. In its place, a large, well capitalised foreign banking group with global transaction banking capabilities has taken the largest single stake. For SBI, the transaction also generated a substantial one-time gain, with proceeds expected to support its own profitability in the quarter the sale completed. For Yes Bank, the presence of a strategic foreign shareholder with board representation is widely viewed as a credibility signal to depositors, corporate clients, and credit rating agencies, distinct from the credibility signal that SBI’s initial 2020 involvement provided, which was primarily about preventing systemic contagion rather than building a long term commercial partnership.
Part VIIYes Bank Today: FY2026 Financials and Current Position
The Headline Numbers
For the financial year ended March 2026, Yes Bank reported total revenue of Rs 36,928 crore and net income of Rs 3,476 crore. Total assets stood at Rs 4,69,105 crore, with total equity of Rs 51,062 crore. The bank’s capital adequacy ratio, or CRAR, stood at 15.3%, comfortably above regulatory minimums. The bank employed approximately 28,690 people as of 2025, operating across a network spread over 300 districts in India comprising 1,198 branches, 193 Business Correspondent Banking Outlets, and more than 1,287 ATMs.
In Q4 FY2026, net advances grew 11.1% year on year to Rs 2.73 lakh crore, with corporate and institutional banking advances up 19.7%, commercial banking advances up 14.5%, and retail loans growing more modestly at 4.7%, reflecting a deliberate calibration of retail growth for profitability rather than volume. Total deposits grew 12.1% to Rs 3.19 lakh crore, with CASA growth of 14.9% driving the CASA ratio to 35.1%. Management indicated that growth across segments is expected to align more closely with broader industry growth rates going forward, having previously grown below industry levels during the recovery phase while asset quality and underwriting standards were re-established.
| Metric | FY2020 (Crisis Year) | FY2025 | FY2026 |
|---|---|---|---|
| Total Revenue | Sharp decline amid crisis | Recovering | Rs 36,928 crore |
| Net Income | Large net loss (post AT1 write down) | Returning to consistent profit | Rs 3,476 crore |
| Total Assets | Substantially reduced post-moratorium | Growing | Rs 4,69,105 crore |
| Gross NPA Ratio | Above 16-17% (pre cleanup) | 1.6% | 1.3% |
| Net NPA Ratio | Elevated | 0.3% | 0.2% |
| CASA Ratio | Depressed amid deposit run | 34.3% | 35.1% |
| Largest Shareholder | Original promoters (pre-rescue) | SBI (23.97%) | SMBC (approx. 24.2%) |
The Leadership Transition to Vinay Tonse
During FY2026, Prashant Kumar, who had led Yes Bank as Managing Director and CEO since shortly after the March 2020 reconstruction and oversaw the bank’s entire recovery journey, was succeeded by Vinay M. Tonse as Managing Director and CEO. This transition occurred against the backdrop of the bank reporting its strongest quarterly results in years, with Q4 FY2026 net profit up 44.7% year on year and asset quality metrics at their best levels since before the moratorium. Rama Subramaniam Gandhi serves as the bank’s non-executive, part-time chairman and independent director.
Yes Bank’s Recovery Across Key Dimensions (Illustrative Progress)
Gross NPA Ratio (from approx. 17% peak to 1.3%)Largely resolved
CASA Ratio (toward an industry-typical 35 to 40% range)35.1%, approaching target range
Return on Assets (toward the 1% management aspiration)Approaching 1% through FY2026
Ownership Stability (SBI rescue phase to SMBC strategic phase)Transition completed Sep 2025
AT1 Bondholder Litigation (Rs 8,415 crore dispute)Unresolved as of mid 2026
Note: Bar widths are illustrative representations of qualitative progress on each dimension based on the figures and milestones discussed in this article, not precise statistical indices.
What the Yes Bank Story Represents
Yes Bank’s arc from a 2004 startup built on the proceeds of a single Dutch joint venture to a bank that, by 2018, had grown its balance sheet at rates few Indian lenders could match, and then to a institution that required an unprecedented public sector led rescue in 2020, is in many ways a case study in how quickly concentrated corporate lending risk can convert into a systemic event when a handful of large borrowers default simultaneously. The bank’s own BHAG targets from 2011, which explicitly prioritised balance sheet growth rates above 30% annually, were achieved substantially through exposure to corporate groups that became the largest stressed asset cases in Indian banking within a decade.
The reconstruction itself set precedents that are still being tested in court six years later. The Rs 8,415 crore AT1 bond write down, whatever its ultimate legal resolution, has already shaped how Indian banks, regulators, and investors think about the loss absorption features of AT1 instruments, given that the Supreme Court’s eventual ruling will have implications well beyond Yes Bank for the more than Rs 1 lakh crore of AT1 bonds outstanding across the Indian banking system. The fact that equity shareholders avoided an equivalent write down while AT1 bondholders did not has also informed ongoing debates about the relative seniority and risk pricing of different forms of bank capital in India.
For Yes Bank itself, the period from 2020 to 2026 represents a genuine operational turnaround: gross NPAs down from peaks above 16-17% to 1.3%, security receipts from the JC Flowers transfer brought to nil, CASA ratios climbing toward levels typical of healthier private banks, and four consecutive years without a loss-making quarter by the bank’s own account. The arrival of SMBC as the largest shareholder in September 2025 closes the chapter that began with the SBI-led rescue and opens a new one, in which Yes Bank’s future will be shaped less by the legacy of its pre-2020 lending decisions and more by what a Japanese banking group with global transaction banking capabilities chooses to build with its 24% stake and board seats. Whether that next chapter resembles a conventional strategic partnership or evolves toward something closer to full foreign control over time is a question that will likely take years, not quarters, to answer.
Frequently Asked Questions
The moratorium on March 5, 2020 followed a multi-year deterioration in Yes Bank’s asset quality, driven primarily by large corporate lending exposures to groups including IL&FS, DHFL, and the Anil Ambani led Reliance Group, many of which defaulted between 2018 and 2020. RBI supervisory reviews found that Yes Bank’s reported non performing asset figures had significantly understated the actual risk in its loan book in successive years. By late 2019 and early 2020, the bank’s capital adequacy had deteriorated, multiple attempts to raise external capital had failed, and large depositors had begun withdrawing funds in a deposit run, leaving the bank unable to meet its obligations without intervention.
The moratorium capped withdrawals at Rs 50,000 per depositor, superseded the bank’s board, and installed an administrator, while the RBI and the government finalised a reconstruction plan. The moratorium was lifted on March 18, 2020, after the Union Cabinet approved the reconstruction scheme on March 13, under which SBI and seven other banks invested fresh capital.
As part of the March 2020 reconstruction, the administrator wrote down two tranches of Yes Bank’s Additional Tier 1 bonds, worth Rs 3,000 crore and Rs 5,415 crore, to zero, a combined Rs 8,415 crore. AT1 bonds are designed to absorb losses when a bank’s capital falls below certain thresholds, but bondholders argued that the March 13, 2020 reconstruction scheme itself did not explicitly authorise this write down, and that the administrator exceeded his authority by ordering it the following day. They also argued the write down breached a pari passu clause in the bonds’ original 2013 offer documents, which stated all AT1 bonds should be written down proportionally rather than selectively.
In January 2023, the Bombay High Court ruled in favour of the bondholders and quashed the write down. The government, RBI, SBI, and Yes Bank appealed, and the Supreme Court stayed that ruling in March 2023. Hearings have continued through 2025 and into 2026 without a final verdict, with the Centre arguing the write down was necessary to protect depositors and consistent with how AT1 instruments are designed to function, while warning that overturning it could create systemic risk given the more than Rs 1 lakh crore of AT1 bonds outstanding across Indian banks.
Before September 2025, SBI was Yes Bank’s largest shareholder at approximately 23.97%, a position it had held since leading the March 2020 reconstruction, alongside seven other banks, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, IDFC First Bank, Federal Bank, and Bandhan Bank, that had also invested in 2020 and held smaller stakes. In May 2025, Japan’s Sumitomo Mitsui Banking Corporation agreed to acquire a 20% stake at Rs 21.50 per share for approximately Rs 13,482 crore, through a secondary purchase from SBI, which sold approximately 13.18% for over Rs 8,889 crore, and the other seven banks, which collectively sold the remaining approximately 7%.
The transaction completed on September 18, 2025, after RBI and Competition Commission approval. SBI’s stake fell to approximately 10.8%, while SMBC became the largest shareholder with approximately 24.2%, with RBI approval to go up to 24.99%. Two SMBC nominee directors joined Yes Bank’s board. The deal was described as the largest cross border investment ever made into the Indian banking sector and marks the transition of Yes Bank from a bank majority controlled by an Indian public sector rescue consortium to one with a large Japanese strategic shareholder.
In 2022, two years after the reconstruction, Yes Bank transferred a portfolio of legacy stressed loans with a gross value of approximately Rs 48,000 crore to JC Flowers Asset Reconstruction Private Limited, a specialist asset reconstruction company, in exchange for security receipts representing the bank’s residual claim on future recoveries from those assets. Alongside this, Yes Bank raised approximately 1.1 billion US dollars in fresh capital from private equity investors Carlyle Group and Advent International.
This transfer mattered because it moved the bulk of the bank’s pre-2020 legacy bad loans off its balance sheet in a single transaction, allowing management to focus on new lending and recovery operations rather than continuing to manage a large, slow-moving pool of stressed assets directly. Over the following years, the value of the security receipts received from JC Flowers was steadily recovered, and by Q4 FY2025, Yes Bank reported that the net carrying value of these security receipts had been brought down to nil, effectively completing the cleanup of the pre-reconstruction legacy book and contributing directly to the gross NPA ratio falling to 1.3% by Q4 FY2026.
By the metrics reported for FY2026, Yes Bank’s financial position has improved substantially from the crisis years. The bank reported total revenue of Rs 36,928 crore and net income of Rs 3,476 crore for FY2026, with total assets of Rs 4,69,105 crore and a capital adequacy ratio of 15.3%. Gross and net NPA ratios fell to 1.3% and 0.2% respectively by Q4 FY2026, the lowest since before the 2020 moratorium, and the CASA ratio reached 35.1%. Quarterly net profit grew from Rs 502 crore in Q1 FY2025 to Rs 1,068 crore in Q4 FY2026, with management describing four consecutive years without a loss-making quarter.
Rana Kapoor, the bank’s founder, was arrested by the Enforcement Directorate on March 8, 2020, three days after the moratorium was imposed, in connection with investigations into the bank’s lending practices. He has subsequently been granted bail in several related cases as those proceedings continue through the Indian legal system. He no longer holds any role at Yes Bank, and the bank’s current leadership, ownership, and board are entirely distinct from the founding team, following the 2020 reconstruction and the 2025 entry of SMBC as the largest shareholder.
Disclaimer: This article is for informational and educational purposes only and is current as of June 10, 2026. Facts and figures are sourced from Yes Bank’s quarterly and annual results filed with BSE and NSE, RBI press releases and the Yes Bank Limited Reconstruction Scheme, 2020, Bombay High Court and Supreme Court proceedings on the AT1 bond matter, and disclosures made by SBI and SMBC in connection with the September 2025 share transaction. This article does not constitute investment advice. Banking stocks carry risks including credit, interest rate, and regulatory risk.
