April 28, 2016

Rana Kapoor: How Yes Bank emerged from NPA crisis unscathed

Q: What is your secret? If you are 65 percent exposed to a corporate sector which for everybody else is throwing up probably 15 percent of bad loans, how is it that your 65 percent is producing less than 1 percent of bad loans? 
Yesbank at lifetime highs


A: The solution lies in building a risk culture, building a risk architecture and building 3 eyed principle which at least in our bank is defined as relationship managers, product managers and risk managers who all look at a relationship from all angles. That makes sure that when you have a problem the red flag surfaces early enough.

Second principle is that risk is related to structure. This is not a commoditised business. This business is about specialisation. So, depending on the segment, depending on the industry sector banks need to specialise.

I am very pleased to share with you that after 12 years Yes Bank has proven over the last 32 quarters, since the global crisis started, that we are committed to building the risk architecture through specialisation. Everybody is affected by the heightened risk environment but more importantly is how do you salvage that, how do you proactively de-risk. Not everybody is a wilful defaulter. There are some very genuine problems and you have to help them through preservation of economic value, preservation of assets. 90-95 percent are good businesses.

Read more at: http://www.moneycontrol.com/news/results-boardroom/rana-kapoor-how-yes-bank-emergednpa-crisis-unscathed_6429341.html

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