The Banker Who Crushed His Diamonds by Furquan Moharkan (read novel full txt) 📕

which had become closely intertwined over the years. By September-end, it was clear that YES Bank wasn’t getting any funds, and by October-end DHFL had collapsed.

On the morning of 20 September, after most fund managers had said a clear no to the bank’s attempts at wooing them, I mailed a questionnaire to the bank. The team deputed by the bank to fight the crisis called me up and assured me that everything was fine, money was on the way and no one had said a ‘no’ to the bank. But I went for the next logical step and asked them if they would be willing to say this on record. The answer came as no surprise: ‘No, we can’t comment on the record. You can say declined to comment.’

We rolled out a story in the Saturday edition of Deccan Herald. Even though the markets were closed, the story picked up really well. Unnerved, the bank’s marketing and communications team sent my publication and me a legal notice, which they ultimately didn’t pursue. As soon as the legal notice was sent, word spread among the circles and I started getting calls from friends in other publications. They revealed details about YES Bank that gave me a lot of insight into Rana Kapoor’s mindset.

Next morning, as the share markets opened, the shares of the bank faced a lot of selling pressure. In a move which was directed to stabilize its shares, the bank issued an unprecedented two-page clarification, stating how in the past they had raised funds and that there were no problems in the bank. But by then it was too little, too late—everyone knew about the bank’s woes. In the next ten days, the bank’s shares were hammered on the exchanges—crashing by 42.3 per cent. By the end of those ten days, on 1 October 2019, a YES Bank share was worth just 16 per cent of what it was exactly a year ago. A lot of this share price fall was attributed to Rana Kapoor—the bank’s co-founder and former CEO—downsizing his stake in the bank. More about that later, but it is safe to say that this fall had a spooking effect on the already cautious depositors.

As October set in, the prudent depositors of the bank started to play safe. By the end of October, I suddenly got a call from one of the bank’s senior executives, whom I happened to know, informing me about a very grim situation—a situation that continued even after the bank was bailed out on 5 March 2020. In December 2019, I got a call from the same banker. ‘There is a huge run on the bank. As of November-end, the depositor base has eroded Rs 37,000 crore,’ he said. However, the bank was hoping to partially mitigate the damage, banking on the year-end salary and bonus disbursals to shore up the deposits. But that remained just unmaterialized hope as the bank continued to bleed.

Despite having accurate information, I decided not to pursue the story until I got a document. My mind said that it may expedite the run on the bank and the retail depositors would be hit. By February, the situation was far from stabilizing or improving, and I got a document stating the obvious.

This was days before the bank announced the delay in results. The day we rolled out the story about the bank delaying the results in the wake of heavy withdrawals, it confirmed the same to stock exchanges through a filing. A director at YES Bank, who had worked with both Ravneet Gill and Rana Kapoor, told me, ‘The sky had patches everywhere. No one knew which one could be fixed first.’ All these patches were hidden from the public glare, but they came out tumbling after the fall of YES Bank.

But throughout all this, every action that the bank took, every move that the bank made, revealed a huge façade behind which the bank had existed all these years. More than those patches, many in the markets seem to be puzzled about the psychological make-up of the man—Rana Kapoor—who over the years had transformed into a villain in the story of YES Bank. Was he alone in this game at YES Bank?

So, that is why I am here, bringing to you the story of the most high-profile banking failure and the man whose story ran parallel with that of the bank—YES Bank and its founder and former CEO Rana Kapoor.

As we dive into the book, you’ll read many snippets of information from sources who have worked closely with Rana Kapoor and have interacted with him directly at some point. This is a story of a soap opera-styled family feud, betrayals, manipulations, and the mixing of personal and corporate lives—a story that is no less than a thriller.

THE FIRST SIGNS OF TROUBLE

In September 1957, a Punjabi family in Delhi was blessed with a baby boy—a boy who would go on to become famous and then gain notoriety. This boy happened to be Rana Kapoor, who sixty-three years later, is in the firm grip of the Enforcement Directorate (ED) for alleged money laundering.

As he grew up, the boy developed connections with the rich and powerful of India. But it was not just connections that he was banking upon; to his credit, he was smart. After all, graduating from the prestigious Shri Ram College of Commerce (SRCC) is not everyone’s cup of tea.

After his graduation in 1977, Rana went ahead and obtained an MBA degree from Rutgers University in New Jersey, USA, by 1979. It was during this period that he interned in Citibank—a stint that would have far-reaching consequences on Rana’s decisions going forward. At Citibank, he was mesmerized with the glamour and culture of the global banking world and felt a burning desire to set up something on his own. Later, when he went founded a bank of his own, Rana used the same colours in the logo of YES Bank as in Citibank’s. While