Yes Bank

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.


Introduction of YES BANK

YES BANK, India's new age private sector Bank, is an outcome of the professional entrepreneurship of its Founder, Rana Kapoor and his highly competent top management team, to establish a high quality, customer centric, service driven, private Indian Bank catering to the “Future Industries of India”.YES BANK is the only Greenfield license awarded by the RBI in the last 14 years, associated with the finest pedigree investors. YES BANK has fructified into a “full service” commercial Bank that has steadily built Corporate and Institutional Banking, Financial Markets, Investment Banking, Corporate Finance, Business and Transaction Banking, Retail and Wealth Management business lines across the country, and is well equipped to offer a range of products and services to corporate and retail customers.

The Bank has adopted international best practices, the highest standards of service quality and operational excellence, with innovative state-of-the-art technology, and offers comprehensive banking and financial solutions to all its valued customers. A key strength and differentiating feature of YES BANK is its knowledge driven approach, which goes beyond the traditional realm of banking, and helps adoption of a diagnostic and prescriptive approach towards superior product structuring.

YES BANK has a vision to champion ‘Responsible Banking' in India where the concepts of Corporate Social Responsibility and Sustainability are embedded in the DNA of the organization and integrated in its Business Focus. YES BANK is committed to adding long term value to society, to differentiate itself in the marketplace based on a strong 'sustainability mandate' and to build in flexibility and openness as part of its core strategy. The Bank has engaged with global thought leadership forums like the Clinton Global Initiative (CGI), Triple Bottom Line Investing (TBLI) and Tallberg Forum. YES BANK has recently become the first Indian Bank to become a signatory with the United Nations Environment Programme (Financial Initiative).

History - Yes Bank

Yes Bank was incorporated as a Public Limited Company on November 21, 2003. Subsequently, on December 11, 2003, RBI was informed of the participation of three private equity investors namely {Citicorp International Finance Corporation, ChrysCapital II, LLC and AIF Capital Inc.), to achieve the financial closure of the Bank. RBI by their letter dated February 26, 2004 provided their no-objection to the participation of the three private equity investors namely Citicorp International Finance Corporation, ChrysCapital II, LLC and AIF Capital

Yes Bank obtained its certificate of Commencement of Business on January 21, 2004. Subsequently, in March 2004, the Bank achieved the mobilization of the initial minimum paid up capital of Rs. 2,000 million. Further, the Promoters by their letter dated March 29, 2004 made a final application for a banking licence under Section 22 (1) of the Banking Regulation Act, 1949 providing complete details of the capital structure, the composition of Board of Directors, the proposed human resources, information technology, premises and legal-policies and the business and financial plan of the Bank.

2005 - Yes Bank on May 12, 2005, forays into retail banking with launch of international Gold and Silver debit card in partnership with MasterCard International.

Unethical Work In YES BANK


Firstly let us know about IPO.

What is an IPO?

An ‘IPO' is the first sale of an Company common shares to public investors. When an company wants to enter the market, it makes its share available to common investors in form of an auction sale.

Each application for an ‘IPO' has to be within a cut-off , which is eligible for allotment in the retail investors' category. But in this case, financiers and market players illegally cornered these retail investors' shares.

What actually is the SCAM?

It involved manipulation of the primary market—read initial public offers (IPOs)—by financiers and market players by using fictitious or benaami demat accounts.

While investigating the Yes Bank scam, Sebi found that certain entities had illegally obtained IPO shares reserved for retail applicants through thousands of ‘Benaami demat accounts'.

They then transferred the shares to financiers, who sold on the first day of listing, making windfall gains from the price difference between the IPO price and the listing price.

When was this scam came to light?

The IPO scam came to light in 2005 when the private 'Yes Bank' launched its initial public offering. Roopalben Panchal, a resident of Ahmedabad, had allegedly opened several fake demat accounts and subsequently raised finances on the shares allotted to her through Bharat Overseas Bank branches.

The Sebi started a broad investigation into IPO allotments after it detected irregularities in the buying of shares of YES Bank's IPO in 2005.

What Triggerd the SEBI Probe?

On October 10 last year, an Income Tax raid on businessman Purushottam Budhwani accidentally found he was controlling over 5,000 demat accounts. Sebi finds this suspicious.

On December 15, Sebi declared results of its probe, how a few people cornered a large chunk of YES Bank IPO shares.

On January 11 this year, Sebi discovered huge rigging in the IDFC IPO.

Roopalben Panchal was found to be controlling nearly 15,000 demat accounts.

It was found that once they obtained these shares, the fictitious investors transferred them to financiers.

The financiers then sold these shares on the first day of listing, reaping huge profits between the IPO price and the listing price. The Sebi report covered 105 IPOs from 2003-2005.

The Sebi probe covered several IPOs dating back to 2005, 2004 and 2003 to detect misuse. These included the offerings of Jet Airways, Sasken Communications, Suzlon Energy, Punj Lloyds, JP Hydro Power, NTPC, PVR Cinema, Shringar Cinema and others. A lot more dubious accounts across several IPOs are expected to tumble out in the next few days.

It also detected similar irregularities in the IDFC IPO, in which over 8 per cent of the allotment in the retail segment was cornered by fictitious applicants through multiple demat accounts.

Now Who is Roopalben Panchal?

Roopalben Panchal of IndiaBulls Securities is allegedly the mastermind of the scam. Finance Ministry officials are expected to act against her soon.

How Big this Scam Is?

Apart from the YES Bank fraud, Sebi reportedly has definite data about two IPOs where retail allotments were rigged, but market observers believe the scam is far bigger. The Yes Bank and IDFC cases are only a tip of an iceberg, say analysts.

The Sebi probe has identified more operators and some market intermediaries involved in the misuse of the initial allotment process in public offerings dating back to '04-05.

The Income-Tax Department in Ahmedabad has found that two major accused, Panchal and Sugandh Investments, have together made Rs 60.62 crore in 18 months.

Further Investigation By NSLD

NSDL to probe into Karvy-DP records for IPO abuse

THE National Securities Depository Ltd (NSDL) on Friday said its detailed inspection of the records of Karvy Stockbroking Ltd (Karvy-DP) would help in ascertaining whether the practice of opening multiple dematerialised accounts to misuse retail investors' allotment portion during IPOs was rampant in the system.

Market regulator SEBI, in its interim order on Thursday, asked NSDL to undertake a comprehensive inspection of Karvy-DP, particularly focusing on the systems and procedures put in place by the company for implementing the KYC norms that DPs are required to follow.

A SEBI probe found investors "abusing" the retail allotment process in the YES Bank's IPO in June this year by opening over 7,500 fictitious dematerialised accounts and applying in small lots to corner large-scale allotments in the IPO. SEBI suspects manipulations (opening multiple accounts to apply for IPOs) in various IPOs that have hit the market recently.

Mr Bhave said the inspection would help NSDL in knowing if similar practices were rampant in the system, especially to apply for the IPOs. He, however, refused to set a time-frame on submitting the report of its findings to the SEBI, saying NSDL was not in a position to know the amount of papers and documents it have to inspect at Karvy-DP.

SEBI had asked NSDL to complete the investigation in a "time-bound" manner.

The SEBI order had said that "NSDL shall identify the deficiencies in Karvy-DP with regard to the KYC norms and also ascertain from Karvy-DP the particulars of other potential benami accounts more particularly those multiple accounts having the same contact address or having the same person or entity authorised to operate these demateralised accounts."

Asked whether the existing system was foolproof, Mr Bhave said NSDL would come to know about it only after the inspection of Karvy-DP.

Effects of IPO Scam

IPO scam ruins banks' US plans

The IPO scam has ruins ICICI Bank and the State Bank of India's plans.

"The US Federal Reserve has delayed clearing ICICI Bank's application for entering the US and the SBI's application for expanding operations, reason being poor anti-money laundering practices in India and Benami depository and bank accounts show gross disregard for know-your-customer(KYC) norms. Such norms are part of global anti-money laundering efforts to check the funding of terrorist activities.

These norms require:-

1.Verification of customers' identities and addresses by banks before the opening of accounts

2. Formulation of a policy for customer identification procedure

3. Grading them into low, medium and high risk categories

Right now SBI Banks operates in many continents and in US it is having 4 branches- New York, Chicago, Los Angeles and Washington

And ICICI Bank is present in Canada , UK , Russia ,Singapore,Sri Lanka and West Asia.

The IPO scam has only strengthened the US view which ruins ICICI & SBI Bank Futures.

The Securities and Exchange Board of India(SEBI), which stumbled upon the scam while examining allotments made in the Yes Bank IPO, has blamed banks for derailing the "tried and tested" public issue allotment process.

Lessons from Yes Bank IPO scam

NO System is foolproof from someone determined to undermine it. That is perhaps what the manipulation of the allotment process in Yes Bank's Initial Public Offering proves. A combination of factors appear to have led to the scam.

It was a subversion of the system by one individual who applied to the IPO in 6,315 different names, from the same address, to get a large number of shares allotted. It was also a systemic failure as the depository participant (Karvy Stock Broking, in this case) failed to notice the abnormal fact of the same address supporting more than 6,000 different names.

Then, there is the possibility of collusion at the bank branch that extended a loan to so many `applicants' with the same address. This can be ascertained only by an investigation by the bank or the Reserve Bank of India. One cannot help asking the question though: Whatever happened to prudent lending practices that would have required the bank to verify the address of each borrower as also his personal identity?

To be sure, the Yes Bank IPO may not be the only one where the allotment process was manipulated. There are probably others out there who are attempting or have attempted the same though the full picture may never be known.

How do we prevent such acts that are obviously wrong but also patently unfair to investors who stick to the rulebook and are not allotted any shares? There is a suggestion to review the entire system of quotas for retail, high-net-worth individuals and institutional investors. It would be wrong to do away with a system that is desirable, just because one individual has manipulated it. The quota system was, after all, instituted to ensure that the small retail investor is not discriminated against in the allotment process.

There is also talk that all depository accounts with the same address will now come under the scanner. While this will, no doubt, help identify benami accounts and those opened with fictitious names, care ought to be taken because there could also be genuine cases of more than one account having the same address. This will typically happen where more than one member of a family has an account or where an individual has an account in his name and also in that of his HUF. There could also be cases of an investor who already has one demat account with one participant opening a new one with another just to take advantage of lower transaction charges. Just as there is nothing wrong having multiple savings bank accounts so also with depository accounts. The problem arises only when such multiple accounts are misused.

Any filtering exercise to identify fictitious accounts ought to, therefore, be done at the depository level and not at the depository participant level. There also needs to be coordinated action by the two depositories — NSDL and CDSL, in this respect.

One suggestion by Mr C. B. Bhave, CMD, NSDL, is to allot a unique identification number to every investor who will have to quote it in his IPO application. This is a workable suggestion that deserves serious thought. If allotting a unique identification number is a cumbersome process, the regulator can consider using the income-tax permanent account number (PAN) itself as a unique identification tag.

It is now mandatory to quote the PAN for all applications exceeding Rs 50,000 in value; the regulator can consider making it mandatory for all investors regardless of the value of shares applied for. The only problem is that not all investors are income-tax assessees and, therefore, may not have a PAN number. For instance, housewives and retired senior citizens may be investing in the stock market but may not be assessees. However, even a unique identification number cannot help where there is a systemic failure, as in the Yes Bank IPO case. Finding an answer to the following questions that arise from the episode may help.

First, how did the depository participant fail to notice so many accounts with the same address even assuming that they were opened over several months? The sheer number ought to have caught the eyes of the depository participant.

Crucial is a periodic scan of all accounts with a depository participant not just to weed out benami and fictitious accounts but also to prevent other malpractices. Second, how did the registrar to the issue fail to notice thousands of applications with the same address? The mere fact that an IPO generates tens of thousands of applications cannot be an excuse, given that the entire process of allotment is computerised. Does the registrar scan the list of successful allottees at all?

Finally, how did the applicant manage to secure loans under fictitious names to invest in the IPO? This is the most important question of all and deserves to be investigated fully.

Ethical works by Yes Bank

YES BANK Partners With Zameen Organic for Improving Livelihoods of Cotton Farmers

YES BANK initiative supports organic cotton cultivation

YES BANK, India's new age private sector Bank, today announced its partnership with Zameen Organic, a farmer owned private limited organisation aimed at closer collaboration between farmers and companies for sustainable growth while building a transparent supply chain. This alliance intends to create equal opportunities for producers and workers who have been economically marginalized because of the conventional trading system. The business model empowers farmers to have effective and end-to-end control on the 'Fair Trade Organic Cotton' supply chain which has resulted in improved economic condition of around 6500 cotton farmers from the Adilabad (Andhra Pradesh) and Vidharbha (Maharashtra) region.

Organic Cotton: A ‘Green' Alternative

Organic cotton cultivation is an environmental friendly technique that does not use toxic chemicals. It is a complete production system, which requires sound technical knowledge and careful planning so as to ensure optimum yield.

Fair Trade Movement

Globally, the size of the organic and fair-trade market is estimated at $ 3.3 billion and is further expected to grow at 40% per annaum.

Many Indian companies offering Fair Trade Certification to organic cotton producers in the country, but Zameen Organic Pvt. Limited has the edge of being a farmer owned organization.

Speaking on the occasion, ‘Somak Ghosh', Group President, Corporate Finance and Development Banking, YES BANK said, “As a Main Stream Bank it is important that we ensure continuous flow of credit to such initiatives that are helping farmers get a fair price for their products, thereby increasing profit margins”.

Gijs Spoor, CEO, Zameen Organic elaborating on the model said that, “By mobilising and empowering farmers through an organisation owned by them, Zameen enables farmers to improve their livelihoods, communities, health and environment. YES BANK has helped Zameen boost its operations manifolds by facilitating timely availability of funds.”

YES BANK through this partnership is supporting the Fair Trade movement and production of environment friendly Organic cotton, resulting in livelihood generation, soil improvement and economic independence of the farmers. This endorses the triple bottom line principles of - People, Planet and Profit, which is inherent to YES BANK's business ethos and philosophy.

YES BANK has strong focus on sustainable business solutions to the agriculture, rural and social issues of the country. It is YES BANK's constant efforts to support business initiatives and innovative strategies that help inclusive growth. YES BANK endeavors to provide banking products & services to unbanked communities while supporting its clients with holistic solutions for development challenges.

Some of the Quality steps by YES BANK include:

YES BANK is the sole financer of Kurmanchal Organic Ventures Private Limited which produces organic apple juice in collaboration with apple farmers in Kumaon region of Uttarakhand

YES BANK provided structured trade facility to Paramparik Karigar, an NGO of Indian Craftsmen, enabling several craftsmen to exhibit indigenous Indian handcrafts at an international platform ‘Gateway of India Exhibition' held in New York in March 2007

YES BANK is working closely with Buldana Urban Cooperative Credit Society, the largest urban credit cooperative in India to facilitate to provision of credit facilities to its member farmers against pledge of produce. The Bank is also advising the cooperative on various social initiatives such as social marketing network and community health insurance for its members

About Zameen Organic

Zameen Organic is a pioneering marketing company for Fair Trade, Organic and Pesticide Free cotton in India. It works with poor farming communities in rural India, helping to improve their lives by increasing their salary and decreasing the unnecessary dangers of pesticides.

Zameen's philosophy centre on empowering farmers. The objective is to set up the first ever farmer owned marketing company where ethical brands can source organic fair-trade cotton direct from the farmers themselves. We work directly with a capacity building NGO, AOFG which trains farmers in effective farming procedures and in management and organizational skills.

In addition to empowering farmers in themselves, Zameen works to build profitable supply and demand partnerships between the strengthened farmer groups and ethical brands. The company market the farmers' crop and vision and help create long lasting trading relationships with buyers, offering complete transparency within the supply chain.

YES Bank highlight importance of CSR

CORPORATE Social Responsibility (CSR) is gaining importance in the world of globalisation with increased number of informed citizens and changing social expectations. With a strong linkage and correlation between CSR and business, between social empowerment and commercial sustainability, the Confederation of Indian Industry (Norhtern Region) and the YES Bank have jointly brought out a knowledge report on CSR as a tool for inclusive growth, social equity and affirmative action. CII Northern Region chairman Deep Kapuria says CSR is an important business strategy because wherever possible consumers want to buy products from companies they trust; suppliers want to form business partnerships with companies, employees want to work for companies they respect and NGOs want to work with companies seeking feasible solutions and innovations in areas of common concern. He said in conjunction with a development paradigm that ensures sustainable growth, CII works with strategic partners to build on shared synergies, conserve the environment and create sustainable value in sync with its unique theme for the year,' Building people, building India.' YES Bank MD and CEO Rana Kapoor claimed that the bank has identified itself in a leadership position in the country's march to economic and human development. YES Bank remains committed to assisting stakeholders in developing sustainable and commercially viable CSR projects on a public private partnership (PPP) mode incorporating the principles of social equity and community participation. CSR involves a business identifying its stakeholder groups and incorporating their needs and values within the strategic and day-to-day decision-making process. It, however, goes beyond the occasional community service action as CSR is a corporate philosophy that drives strategic decision-making, partner selection, hiring practices and, ultimately, brand development. The report points out that CSR is now being looked at as a concept different from pure philanthropy and more in tune with strategic intervention that ultimately benefits industry. CII has adopted the visionary route of formulating a code of conduct for affirmative action. The company affirms its recognition that its well being is interlinked to all sections of the society. The company believes in equal opportunity in employment for all sections of society and considers it a component of its growth and competitiveness

‘CUSTOMER' As a Stake Holder

Different Facilities Given to Customers by YES BANK

1.Foreign Exchange

The highly experienced and dedicated team of FM provides comprehensive services to meet our clients' foreign exchange needs. In order to help our customers to effectively conduct transactions and manage risks in the global markets, the team has dedicated sales personnel who focus on providing in depth insights and timely advice on various currencies and markets.
We offer spot and forward foreign exchange for hedging receivables and payables

-Spot (INR and Non-INR denominated)

-Forwards (INR and Non-INR denominated)

2.Forex Solutions

We, at Yes Bank, have introduced On-line Forex Trading Services for privileged customers to make Forex transactions more profitable and convenient. This user-friendly Forex Trading Service gives you the freedom to trade in various currencies directly, at the click of a button. Our experienced team of Forex experts will provide timely inputs to maximize your returns on every Forex transaction made. Add to it the technical wizardry of our proprietary trading platform that ensures you real time transactions with superior security levels to maintain user confidentiality. With this state-of-the-art service you can do everything right from tracking real time trading rates of all major currencies, booking and cancelling deals online, viewing your deal history and even chatting with a trader on-line.

3.Fixed Income

FM ensures fulfilment of the financial needs of clients by offering solutions around fixed income distribution, mutual fund sales, securitization and loan syndication in the domestic market.

YES BANK has the expertise and experience to develop the best solutions and execute them with precision . Through the syndication of funds from the domestic markets, the group assists corporate clients in their endeavour to raise funds

For clients with surplus funds., the group facilitates the selection and execution of investments in fixed income instruments, including both SLR and non-SLR

4.Derivatives & Structured Products

Our team provides structured risk management solutions for clients looking to manage their foreign currency and interest rate exposures. Our solutions range from basic to complex derivative products, and include the following:

1. Interest Rate Swaps (Rupee and foreign currency)

2. Cross Currency Swaps, including Principal Only Swaps, Coupon Only Swaps

3. Interest Rate Options including caps, floors, collars and digitals

4. Cross Currency Options

5. Structured Products involving a combination of the above

Through a combination of different derivatives, we also design Structured Products, enabling our clients to manage exposures and take advantage of developments in the interest rate and currency markets.

5.Commodities Risk Management Advisory

The FM Commodity Risk Management Advisory Services support our clients business by helping them in developing robust commodity risk management frameworks which enable managing the increasing volatility in the underlying commodity much more efficiently. The key objective of this program is to create an enabling environment and minimize the shocks of the price volatility , so as to let the customer focus on the core business activity and optimize overall realization.

6.Liquidity & Balance Sheet Management

With the growing complexity and sophistication of financial products and the corresponding liquidity/interest rate risks associated, today's business environment requires asset-liability management and planning tools that deliver timely and reliable results and simplified solutions.

This desk within the Financial Markets group is primarily involved in managing liquidity/asset-liability mismatch and Funds Transfer Pricing Process for various streams and offers a complete set of asset-liability management solutions to help clients measure, monitor and analyze performance to achieve their financial goals.

Our team develops new products and innovative market solutions tailored to meet clients' individual needs. We combine our extensive product and service offerings with an indepth understanding of financial management concepts to help our clients to optimize their balance sheet performance. We also extend this expertise to our institutional clients, including co-operative banks, selective state banks and NBFCs.

7.YES Bank's structured products for MFIs

Coimbatore, April 13 YES Bank has developed a series of innovative structured transactions for microfinance institutions(MFIs) . The bank has, with the introduction of such structured financial products, created a new asset class and brought the three microfinance institutions — Equitas Microfinance India Pvt Ltd, Share Microfin Ltd and SKS Microfinance — to mainstream debt capital market.

The transactions, according to its Group President, Corporate Finance and Development Banking, Mr Somak Ghosh, would cumulatively amount to more than Rs 190 crore and cover over 4 lakh borrowers from the bottom of the pyramid. The transactions, designed/tailored to enhance returns for the MFIs include issuance of Commercial Paper and Non-Convertible Debenture.

Claiming that the bank has taken the lead in introducing specialised structured transactions in the MFI space he said ‘it has been executed for the first time not only in India, but also worldwide.' The bank's efforts had resulted in three different originators partnering with rating agencies and law firms to open up debt capital markets to microfinance institutions, Mr Ghosh said.

Asked how it would benefit the MFIs, he said ‘the borrower would be able to raise the loan at competitive rates (in the immediate term). It would also open up a new market of possible lenders to the microfinance institution, but this can be expected only over the medium term.'

The bank is planning to structure and place similar rated paper in the 2009-10 fiscal. “The demand potential is huge. The total penetration of the MFIs is only 8 per cent of the market and this excludes SHG linkage. Since the MFI penetration is low and they lack access to debt capital, the estimated demand could be around Rs 8,000 - Rs 10,000 crore/annum," he said.

8.YES Bank makes an edge by e-payments

Despite its limited branch network, YES Bank foresees huge business opportunity from its e-payment solutions offering. Yes Bank has grabbed this opportunity by providing its customers online updates.

The bank is among a few private sector and foreign banks to offer transaction banking service. ‘While others too offer this service, we have created a niche by providing online updates'

The transaction banking service includes cash management, capital market and trade, and trade finance services.

They are currently doing Rs 500 crore of transactions (in value terms). Around 200 customers are using the e-payment solutions, but each is on a different level of sophistication.'

But he was evasive on investment in this technology.

Suppliers as a Stake Holder

1.YES Bank raises Rs 364 cr

Yes Bank has raised Rs 364 cr ($85 million) in a combination of upper tier II subordinated debt and hybrid tier I capital from RABO Bank. The quantum of the upper tier II private placement issuance of unsecured, redeemable, non-convertible, subordinated bonds is Rs 343 cr ($80 million) with a tenor of 15 years and the remaining Rs 21 crore ($5 million) comprised the hybrid tier I capital (Perpetual Capital), the bank said in a release. Mr Rana Kapoor, Managing Director and CEO of YES Bank, said the bank would periodically augment its capital base to fund expansion plans.

2.Yes Bank to borrow 5 year loan of € 20 million from DEG

Yes Bank has signed a loan document with DEG, one of Europe's major development finance institutions.under the terms of loans , yes bank will take 5 year loan of € 20 million from DEG.

The sources informed that the loan will be used for further on- leading to conglomerates in the small & medium enterprises(SME's) sector. Yes bank has opened a dedicated Business Banking unit known as ‘YES Business' that provides services to the SME sector, driven by its knowledge banking approach, and helped by a team of experts, along with a suite of products, services as well as resources.

Functionaries of YES BANK stated that the bank offers all the services necessities to SME's across various product segments like fund lending, cash management, payment solutions, direct banking, trade services as well as advisory through a branch network of 90 branches across significant SME clusters.

Right now YES Bank is having 123 operational branches spread across 97 locations in the country with 2 national operating centres in Mumbai & Gurgaun.

3.Yes Bank gets nod to raise funds via QIP

Yes Bank today announced that its board has approved a proposal to raise funds through the Qualified Institutional Placement route. The bank will issue 2 crore equity shares in one or more tranches, it said in a notice to the BSE.

YES BANK & there Tie-Up's

1.SKS Microfinance , YES Bank tie up

SKS Microfinance has entered into a securitisation deal worth Rs 100 crore with YES Bank. The transaction would allow the bank to purchase 1,48,950 micro loans extended to unbanked SC, ST and minorities' families identified by the Reserve Bank of India as weaker sections. The transaction has been rated as `Very Strong Safety' by CRISIL, the Hyderabad-based company said in a release.


UNEP FI for the first time join hands with an Indian Bank. United Nations Environment Programme Finance Initiative (UNEP FI) today announced the launch of their India initiative. The Programme was launched by holding a workshop for Indian Financial Institutions and banks on “Mainstreaming Sustainability in Indian Financial Institutions”. The workshop also coincided with a high profile CEO Luncheon hosted by YES BANK. ABN AMRO was the Presenting Sponsor and YES BANK the Knowledge Partner for the workshop.

The United Nations Environment Programme Finance Initiative (UNEP FI) is a unique global partnership between the United Nations Environment Programme (UNEP) and the private financial sector. UNEP FI works closely with over 160 financial institutions who are signatories to the UNEP FI Statements, and a range of partner organizations to develop and promote linkages between the environment, sustainability and financial performance. Through regional activities , a comprehensive work programme, training programmes and research, UNEP FI carries out its mission to identify , promote, and realise the adoption of best environmental and sustainability practice at all levels of financial institutions operations.

Being a Knowledge Partners, YES BANK will play an important and proactive role in sustainable development and that sustainability services will increasingly become a critical component of the banking portfolio of services.

The partnership is aimed to support and expand the Bank's Responsible Banking practice which combines the Triple Bottom Line approach of combining sustainability with commercial returns. “YES BANK is the first Indian Bank to become a Signatory with UNEP FI”.

Mr. Rana Kapoor, Founder / Managing Director and CEO, YES BANK, said “This joint effort aims to promote the concept of corporate sustainability and Sustainable Banking that is critically important given the new market realities that are impacting business. Our objective is to see sustainability as an opportunity for social and economic value generation.”

“We are proud to be linked with UNEP FI and commit ourselves to identify, promote and realize the adoption of best sustainable practices at all levels of organizational operations,” added Mr. Kapoor.

UNEP FI's latest publication “Sustainability Management and Reporting: Benefits for Financial Institutions in Developing and Emerging Economies” was also released. The report was authored by a group chaired by a multidisciplinary group drawn from International banks.

Announcing the significant development, Mr. Paul Clements-Hunt, Head, UNEP FI said "UNEP welcomes this important initiative amongst the Indian banking community. It comes at a time when there is great dynamism worldwide in the complex area of sustainable finance. The growing engagement by institutions in UNEP FI, the USD 6 Trillion now backing the UN Principles for Responsible Investment and the success of the Equator Principles for project finance confirm the critical recognition of financial services and their pivotal role in driving sustainable development. YES BANK and the other institutions working with UNEP should be congratulated for their leadership in the area and we hope many other institutions in India join UNEP FI activities," commented Paul Clements-Hunt, Head of UNEP Finance Initiative.

Mr. Clements-Hunt continued: " The launch of the UNEP FI Sustainability Management and Reporting publication at the Indian event provides superb guidance for those banks in India and the region that wish to either commence on or further advance their sustainability commitments and build sustainable finance into the heart of their institutions policy-making and core business operations."

Rob Tacon, Head, Risk Reporting, Standard Chartered Bank, said, "I am very proud to have chaired the group that developed the Sustainability Management and Reporting document that was launched today. The document has been designed to provide practical advice and guidance to the Finance community who wish to go on the very exciting sustainability journey. By drawing on the experiences of Financial institutions in the emerging economies, this becomes a living document that aims to help set the case for adopting Sustainability Management and Reporting."

This partnership with a highly significant and successful organisation will work towards strengthening to develop profitable, sustainable mechanisms for integration into financial business models. It will also foster private sector investment in sustainable industries and technologies and exemplify the Bank's commitment to walking the sustainability talk.

Mr. Kapoor added, “YES BANK, at an early stage in its evolution has adopted sustainability as one of the cornerstones of its business strategy. Inculcated through the organisation's ‘Responsible Banking' philosophy, the Bank's sustainability approach is a well-defined, comprehensive strategy that is embedded across all business units.”

3.Mashreq and YES Bank Launches Global Indian Banking Services

To strengthen its service offering to Mashreq Gold customers in the UAE, Mashreq today announced a strategic alliance with YES Bank, India's new age private sector bank to launch Global Indian Banking (GIB) Services across the UAE with its signature ‘YES First Wealth Management Program'. The partnership will allow Mashreq Gold customers in the UAE to open GIB (Global Indian Banking) Non Resident External (NRE), GIB Non Resident Ordinary Rupee (NRO) savings accounts, GIB NRE Fixed deposits, GIB NRO Fixed deposits, GIB FCNR deposits amongst others.

YES BANK will provide Mashreq Gold customers the finest banking experience through YES FIRST- The Premier Wealth Management programme from YES BANK in the UAE & India through its 107 branches across 88 locations. Once the respective GIB account is activated, customers will be able to directly interact with YES Bank thereby allowing easy access and management of funds located in India without being charged for remittances.

The YES FIRST programme aims at providing customized solutions for multiple investment opportunities in India through a range of innovative products and advisory services. These innovations allow customers to invest in mutual funds across 29 Asset Management Companies operating in India, pay utility bills to over 100 Indian billers, amongst others. Additionally, Mashreq Gold customers can now aggregate their multiple online saving, loan, investment, credit card accounts among others through their GIB account. This exclusive service provides customers complete control of their finances while enabling them to evaluate their net worth on a periodic basis.

Douglas Beckett, Head of Retail Banking, Mashreq said: “Through this alliance, we are offering a more convenient package to customers who wish to continue banking in their home country without the complications associated with banking from abroad. As a market leader we are committed to continual improvement in all aspects of our business and with this new partnership we will be able to further reinforce product offer, service and delivery to our customers.”

Commenting on the new strategic partnership, Mr. Arun Agrawal, President & Global Head - International Banking at YES BANK said: “YES BANK is delighted to offer Mashreq Gold customers a consistent superior service experience through a range of products and services. The Bank is committed to executing a concerted cross border strategy by continuously launching innovative solutions that enhances customer satisfaction and increases focus on providing convenience and choice to clients. This partnership enables us to further enhance our product suite and offer customized & holistic products to our clientele in the UAE”

Additional benefits offered to Mashreq Gold customers through YES FIRST Programme include :-

1.YES FIRST International GOLD Debit Card: Enhanced spending and ATM withdrawal limits of up to INR 100,000 per day. Unlimited cash withdrawals at over 1 million MasterCard ATMs and 25 million Point of Sale terminals worldwide and to over 30,000 ATMs and 350,000 Point of Sale terminals in India free-of-cost for life.

2.Airport Lounge Facilities: Exclusive access to premium ‘Clipper Lounges' at all International airports.

3. Business Lounge Facilities: Access to exclusive YES FIRST Business Lounges at flagship YES BANK branches in India.

4. Personalized Wealth Management Services: Integrated, expert and proactive advice on a wide range of financial products, encompassing Mutual Funds, Life and General Insurance, Real Estate, Art and Structured Products through a dedicated Relationship Manager. Comprehensive services include risk profiling, asset allocation, investment monitoring and portfolio rebalancing amongst others.

5. Net Banking: Online fund transfers through RTGS and NEFT, bill payments, online funding of brokerage accounts, E-shopping, Online Travel Reservations

6. Convenience of complimentary doorstep banking while in India

7. Value added services: Concierge Services, Medical Assistance, Home Assistance, Automobile Assistance and Travel Assistance in India.

Further Plans Of Yes Bank In Near Future

Yes Bank goes for big retail sector

The new-generation private sector bank, which will complete six years of operations in March 2010, has drawn up the broad contours of its next five-year plan, called Version II, which will see a big push into retail, which now comprises just 1 per cent of the total business.

The founder, Managing Director & Chief Eexcutive (CEO) of Yes Bank says the bank will roll out the entire suite of retail asset products like educational loans, secured personal loans and of course, credit cards, by 2012. Retail broking and mutual funds are the other areas on the radar.

Kapoor says the bank does not want to build the card business through the open market and will tap its existing customers for issuing credit cards.

Consider the speed at which the bank proposes to move. It is looking at a five-fold rise in its balance sheet to Rs 1,50,000 crore and becoming a mid-size bank by 2015.

While corporate business will continue to be the bank's bread and butter with constant innovations, Yes Bank proposes to step up lending to small and medium enterprises (SMEs) in a big way. Kapoor says the SME plan needs a lot of intelligent planning as it can't be a me-too strategy.

But the real focus will be the retail business where the bank proposes to prop up its net interest (NIM) margins. The target is to increase the current account and savings account deposit share from 9 per cent to 25 per cent by 2012. “If we can do this, our NIM should go up from 3 per cent now to between 3.75 per cent and 4 per cent,” Kapoor said.

This calls for a huge increase in the number of branches. From 123 branches at present, Yes Bank wants to reach 250 branches by 2010, 400 by 2012 and 750 by 2015. The manpower is targeted to go up from 2,700 now to 10,000 by 2015.

This is a completely different language for a bank which chose to sit out when just about everybody was entering retail banking. Now, it is set to press the accelerator harder.

Kapoor founded the bank in 2004 with a capital of Rs 200 crore. on Monday, Yes Bank has Rs 2,400 crore income, a balance sheet of nearly Rs 30,000 crore and market capitalisation of Rs 5,000 crore. Its net profit was Rs 304 crore last year.

Kapoor reels out s to show why he is proud of what his team members have done so far. Apart from being the fastest-growing bank, Yes Bank has a capital adequacy ratio of 17.6 per cent, which means it can grow over 35 per cent without raising further equity by relying on just its profits and debt capital. The bank has a stable provisioning cover of 51 per cent and the Rs 120 crore restructured loans account for less than 1 per cent of the total loan book.

The bank had firmed up plans to scale up retail business in 2007-08 but decided against it after sensing the rising risks.

Ruling out the inorganic route for growth, Kapoor says, “We are not looking at short cuts. The bank would like to be in control to manage risks when it grows upwards of 35 per cent (The current growth rate is 50 per cent).”

While scripting growth, the top management is clear that the domestic market will be at the centre of operations. Any plans to venture overseas will be driven by the needs of Indian companies which are spreading wings rapidly in international markets.

Banking being a capital-hungry business, more so when regulators the worldover are raising minimum capital ratios, Yes Bank expects to inject $1.2-1.5 billion capital in three rounds. The first round of about $250 million is expected before the close of this financial year and the next 18-24 months down the line.

As any expansion of capital may dent the bank's return on equity (RoE) and earnings per share in the short run, Kapoor is quick to point out that capital injection will be done in such a way that the RoE is restored to 22-24 per cent in five-six quarters.

The bank wants to keep a tight control over costs. Kapoor said the cost to income ratio would be kept around 40 per cent.

While giving performance-linked compensation and stock options, Yes Bank has given co-founder status to three top management persons — Rajat Monga, Somak Ghosh and Aditya Sanghi — who have been part of Kapoor's team since the inception of the bank.