what kind of frauds were detected in Yes bank from 2017 - 2020?

Between 2017 and 2020, Yes Bank was embroiled in several fraudulent activities and governance lapses that significantly impacted its financial health. Key issues identified during this period include:

1. Underreporting of Non-Performing Assets (NPAs): The Reserve Bank of India (RBI) discovered that Yes Bank had significantly underreported its NPAs. In 2017, the bank's actual bad loans were found to be five times higher than what was disclosed to the government.

2. Mismanagement and Risky Lending Practices: Yes Bank engaged in aggressive lending to high-risk borrowers, including companies with questionable creditworthiness. This approach led to a substantial increase in bad loans, contributing to the bank's financial instability.

3. Alleged Kickbacks and Money Laundering: Investigations revealed that the bank's founder, Rana Kapoor, and his family members received kickbacks in exchange for sanctioning large loans to certain firms. For instance, Yes Bank invested ₹3,700 crore in short-term debentures of Dewan Housing Finance Corporation Ltd (DHFL), and in return, Kapoor and his family allegedly received ₹600 crore as loans to their company, DoIT Urban Ventures.

4. Fraudulent Loans and Misuse of Funds: The Central Bureau of Investigation (CBI) registered multiple cases against Rana Kapoor for sanctioning loans to companies like Avantha Realty Ltd (ARL) in exchange for personal benefits. In one instance, Yes Bank extended a ₹400 crore loan to ARL as part of a quid pro quo deal, wherein Kapoor's wife acquired a property at a significantly reduced price.

What kind of loan Indusind bank gave to DHFL and was that similar to yes bank?

IndusInd Bank and Yes Bank both had significant exposures to Dewan Housing Finance Corporation Limited (DHFL), but the nature and circumstances of their loans differed.

IndusInd Bank's Exposure to DHFL:

IndusInd Bank extended loans to DHFL as part of its regular lending operations. However, specific details regarding the nature of these loans—such as whether they were term loans, working capital loans, or investments in DHFL's debt instruments—are not publicly disclosed. In January 2020, IndusInd Bank classified its exposure to DHFL as a 'fraud account' and provisioned approximately ₹240 crore (25% of its exposure) due to concerns arising from forensic audits indicating potential financial irregularities within DHFL.

Yes Bank's Exposure to DHFL:

Yes Bank's involvement with DHFL was more intricate and involved allegations of financial misconduct. The Central Bureau of Investigation (CBI) alleged that Yes Bank's co-founder, Rana Kapoor, sanctioned loans totaling ₹4,733 crore to DHFL in exchange for kickbacks. Investigations revealed that these loans were diverted to a group of Mumbai-based builders who had previously defaulted on loans from Yes Bank.

Additionally, the Enforcement Directorate (ED) found that Yes Bank had purchased debentures worth ₹3,700 crore from DHFL between April and June 2018. Subsequently, DHFL provided a loan of ₹600 crore to DOIT Urban Ventures Pvt Ltd, an entity beneficially owned by Rana Kapoor and his family, indicating a quid pro quo arrangement.

Comparison:

While both banks had substantial exposures to DHFL, the key differences lie in the nature and context of their lending:

• IndusInd Bank: Engaged in standard lending practices to DHFL but later identified potential fraud within DHFL, leading to the classification of its exposure as a 'fraud account' and subsequent provisioning.

• Yes Bank: Involved in transactions that were part of alleged fraudulent schemes, including quid pro quo arrangements benefiting its top executives. These transactions led to significant financial misconduct allegations and legal proceedings.

In summary, while both banks extended loans to DHFL, Yes Bank's dealings were marred by internal fraud and corruption, whereas IndusInd Bank's exposure became problematic due to fraudulent activities within DHFL itself