Charting rise & fall of Rana Kapoor

Sanjay Khurana

The year was 2004 when a non-banking financial company applied for a licence to operate as a private bank. It bagged the licence and Yes Bank was born. It soon became the fourth largest private bank in the country.

It was founded by three partners — Harkirat Singh, former head of Deutsche Bank in India; Ashok Kapur, former country head of ABN Amro Bank in India; and Rana Kapoor, former corporate banking head of ANZ Grindlays in India — in collaboration with Rabo Bank of the Netherlands.

In this book, the author, Pavan C Lall, besides detailing Rana Kapoor’s journey, asks tough questions about the banking system, its regulators and even the business environment that led to a crisis in Yes Bank.

After graduating from SRCC, Delhi, and getting an MBA from the US, Kapoor joined Bank of America as a trainee in 1980 and moved up the ladder to head the bank’s wholesale banking business.

Originally, Harkirat Singh and Ashok Kapur had joined hands to start a bank but later Kapur persuaded Harkirat to admit Rana into the partnership because of the family relationship. The late Ashok Kapur’s wife, Madhu Kapur, is the elder sister of Bindu Kapoor, Rana Kapoor’s wife.

Harkirat Singh was out of picture as soon as the bank started operations. With Rabo Bank’s help, Kapur was named chairman and Rana Kapoor the MD and CEO.

Things were fine until 26/11 of 2008 when Ashok Kapur was killed in the terror attack in Mumbai.

As per the book, the downhill journey of the bank did not happen overnight, but over a period of time. Shagun Kapur Gogia, daughter of Ashok Kapur, had written over 30 letters to the RBI when her father died that unfair treatment was being meted out to her. She had also pointed out how the CEO of the bank was running 30 companies at the same time and raised flags on mismanagement and governance issues.

Yes Bank’s top five borrowers accounted for about 54 per cent of its total defaults. They included ADAG Reliance Group, DHFL, Zee (Essel Group), IL&FS and Crompton Greaves. Cox & Kings, Jet Airways and Essar Telecom.

The book pieces together how an aggressive banker achieved name, fame and money and went on to become MD and CEO, and how his “greed” landed him in jail.

On March 8, 2020, the Enforcement Directorate (ED) registered a case against Kapoor under the Prevention of Money Laundering Act and he was arrested. The CBI also charged Kapoor and his family members in a bribery and money laundering case linked to Yes Bank.

As per the ED, Rana Kapoor, his family members and others got benefits worth Rs4,300 crore through companies controlled by his family as kickbacks for sanctioning huge loans through Yes Bank.

The book is an essential read for students of finance, economy, commerce and management. For those entrusted with managing the banking sector, it serves as a valuable guide.