Money & Banking

To identify impending risks, YES Bank makes major changes to risk framework

Our Bureau. Mumbai | Updated on August 17, 2020

AGM on September 10

Private sector lender YES Bank has made significant changes to its risk framework as it tries to cut down on bad loans, and has also worked out a long-term strategy with a focus on sustained liabilities growth and digital innovations.

“The bank has made significant changes to the risk framework to ensure that impending risks are identified, evaluated, and resolved before these convert into reputational risks. We have made foundational changes to strengthen our governance frameworks, identify and mitigate risks,” said Prashant Kumar, Managing Director and CEO, YES Bank, in its Annual Report 2019-20.

The report will be presented at its annual general meeting on September 10.

Sunil Mehta, Non-Executive Chairman of the bank, said the board is working closely with the management to identify and deal with impending issues vigorously and appropriately.

“We are closely monitoring the stress on our credit portfolio on account of legacy issues, current macro-economic and Covid-19 situation,” he stressed.

Main priority

In his message to shareholders, Kumar said that despite the tumultuous times faced by the lender, its main priority would be to provide the best possible experience to customers.

He also outlined long-term strategies for YES Bank 2.0, which would include a strong and sustained liabilities growth focus; more granular franchise; a balanced earnings mix between wholesale and retail; building and monetising new businesses through digital innovation; sharp focus on cost optimisation while continuing to invest in growth opportunities; as well as conforming to the highest standards of risk management, compliance and governance.

This will be the first AGM of the bank since the Reserve Bank of India’s reconstruction scheme for the lender in March.

With the investment by a consortium of domestic banks and financial institutions led by State Bank of India and the further on public offering, among the agenda of the AGM is to approve alteration of Articles of Association of the bank.

“The definition of ‘Affiliate’, ‘Ashok Kapur’, ‘Controlling’ ‘Controlled by’ or ‘Control’, ‘Indian Partners’, ‘Rabo’ and ‘Rana Kapoor’ appearing in Article No.3(a) be and are hereby deleted,” it said.

The bank’s former promoters and co-founders have been categorised as public shareholders.

To keep its employees motivated, the bank has also sought permission to approve amendments to Employee Stock Options Scheme, and increase the total stock options available in the scheme by 15 crore options – from 7.5 crore equity stock options to 22.5 crore equity stock options.

Published on August 17, 2020

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