Fall of an ace banker! Who's Rana Kapoor, the brain behind YES Bank

The YES Bank crisis has shaken up the banking sector of India. On March 5, YES Bank was put under a moratorium and the RBI superseded its board. While the central bank and the country's biggest public sector lender, SBI, were together in their efforts to save YES Bank from further downfall. And, in the midst, its founder and former YES Bank boss Rana Kapoor is being investigated by the ED for alleged money laundering now.

Here's a lowdown on who is Rana Kapoor, coming up of YES Bank and more:

Who is Rana Kapoor?

Rana Kapoor is the founder, former MD and CEO of YES Bank.

Kapoor has also been the former President of ASSOCHAM.

Rana Kapoor's birthplace, education

Kapoor was born in 1957 in Delhi. He completed his schooling from Frank Anthony Public School in 1973 at New Delhi and went to complete his BA degree from SRCC college, University of Delhi, in 1977. Kapoor earned his MBA degree from Rutgers University in the USA in 1980.

Rana Kapoor's family

The founder of YES Bank is married to Bindu Kapoor. They have 3 daughters together- Radha, Rakhee and Roshini.

How did YES Bank start?

Rana Kapoor started as a junior banker in Bank of America's Barakhamba branch. He worked with BoA for 16 years, until 1996. After his stint as the general manager and country head in ANZ Grindlays from 1996-1998, Kapoor joined his brother Ashok Kapur and Harkirat Singh to form Rabo India Finance, an NBFC in 1998.

All the three partners had 25 per cent equity whereas the rest 75 per cent equity was with the Netherlands headquartered Rabobank. Ashok, Rana and Harkirat sold their equity in the venture in 2003 and got the license to set up a private sector bank in the same year. In 2004, YES Bank got off the ground.

Lender of last resort

Even though YES Bank collapsed because of high non-performing assets (NPAs), Rana Kapoor was once known for his unmatched ability to recover every penny lent to the most shrewd and dubious clients, which also earned him the title of the 'lender of the last resort'. These clients included the former boss of the now-defunct Kingfisher Airlines, Vijay Mallya and Deccan Chronicles.

The story behind robust growth

The modus operandi was simple as banks would quietly move NPAs among themselves whenever they got the slightest whimper of a loan turning into bad debt. This simply means Bank A selling a bad loan to Bank B and assuring it that it will buy the asset back at the same price later. Doing this does not add much value but what it does is it saves these private banks from the radar of the RBI.

YES Bank's first negative report

Kapoor lost the ever-illusive battle of optics in 2015 when global financial services firm UBS published a negative report about the asset quality of YES Bank's books. After this jolt, Kapoor promptly filed a complaint against the firm with the capital market regulator.

Kapoor, being an excellent media manager, launched a campaign to discredit the findings of the global firm as "biased", "motivated" and unrealistic research by UBS.

Rana Kapoor's exit from YES Bank

Despite being extremely well networked professionally, Kapoor possibly lost the war of perception in FY17. This was the second time that YES Bank reported a gross divergence in bad loans of Rs 6,355 crore. The actual lender of the last resort was less than pleased and this is the exact event that led to Kapoor's exit from YES Bank.

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