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WHY WAS RANA KAPOOR PROTECTED?

As more and more information comes out in the open, it is clear that under the Rana Kapoor leadership, there have been persistent governance and compliance failures and serious violations of statutory and regulatory rules at Yes Bank. It is reported that before the Reserve Bank decided to truncate the appointment of Rana Kapoor, as the MD/CEO of the bank, eight letters were exchanged between the RBI and Yes Bank, in respect of serious violations of statutory and regulatory guidelines between 2014 to 2018 and persistent governance and compliance failures. The RBI also found continued highly irregular credit management practices, serious deficiencies in governance and a poor compliance culture at the bank. The Reserve Bank thus, apart from cutting short his tenure at the bank, also asked its board of directors to reexamine the proposal for bonus/remuneration to Rana Kapoor and to consider its clawback ie. taking back the bonuses paid to him in the earlier years. So it is not just the fudging and manipulation of the accounts and concealing of NPAs that Rana Kapoor and his team indulged in, but there also permeated a culture of regulatory violations and illegal activities, as also credit/lending practices that were compromised on a case to case basis and were thus termed as irregular by the Reserve Bank.

It is clear that there has been gross mismanagement/malpractices at Yes Bank, amidst a culture of illegal conduct by its top management. Its spokesperson calls Yes Bank a public trust banking institution, but it is public trust that has been belied and mutilated by the bank, by its persistent and pervasive culture of regulatory/statutory violations. But what is certainly not clear is why was Rana Kapoor not sacked by the RBI in 2014 itself, when such serious lapses/violations were found in the management of Yes Bank. It thus raises the question, as to who were those powerful men, whether at the RBI/MoF/PMO, who protected Rana Kapoor, from being sacked and prosecuted for his misdeeds. What are the reasons that his persistent/serious/continuous misconduct/malpractices, which must have grown bigger and bigger with each passing year, were tolerated/condoned and he went unpunished? Apart from RBI the banking regulator going easy on him and taking no action against him, why did the auditors/rating agencies of Yes Bank not raise the alarm bells, but preferred to stay silent.

And now, as usual, much late in the day, the rating agency Moody’s has lowered the credit rating of Yes Bank on governance woes. It is now when the misdeeds/malpractices of the Rana Kapoor led team at Yes bank are out in the open, and the crash in its share prices has inflicted huge losses on its shareholders/investors, that Moody’s has got into action. Such late action by Moody’s also needs an explanation. It is just another case of ambitious bank bosses operating with their team of yes men, and indulging in continued malpractices, at the cost of common man.

 

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