Asset Quality & Risk Management Practices - An Analysis on Yes Bank

9 Pages Posted: 22 Jan 2020

See all articles by Vijaya Kittu Manda

Vijaya Kittu Manda

Gandhi Institute of Technology and Management (GITAM), Institute of Management

Aruna Polisetty

GITAM University, Visakhapatnam - Department of Finance

Date Written: November 9, 2018

Abstract

Indian banks have a dual challenge of dealing with bad loans on one hand and hurrying to be fully BASEL III compliant on the other. Both the Reserve Bank of India (RBI) and the Government of India are using various approaches over the past two decades to help banks. Several different experiences are obtained by domestic and global banks in handling the non-performing loans (NPL) problem. Yes Bank Limited is India’s 4 th largest private sector bank. It has the industry-best NPA ratios and is renowned for its best practises in the banking industry. Can risk management practices and focus on asset quality help banks maintain loan quality and even stop loans from not slipping into the vicious Non-Performing Asset (NPA) cycle?

Data from quarterly & annual reports and other reports is collected to understand management philosophy and asset quality dimensions such as NPA ratio, provisioning coverage ratio, concentration of NPAs, priority sector lending and restructuring of accounts. As the bank evolved from a mid-size bank into a large-size bank in the last 14 years, it gives an opportunity to pose the question - Will NPA size increase as bank transformed from a mid-sized bank to a large bank? Will knowledge-driven sectoral approach to assist customers in their business by lending and offering industry specific financial solutions help the bank? Can technology be used to predict and give early warnings before loans turns sour?

Keywords: Non performing asset, non performing loan, asset quality, risk management, knowledge banking, indian banks, banking in India, NPA ratio, provisioning coverage ratio, NPA concentration, priority sector lending, GNPA, NNPA

JEL Classification: G21, G28

Suggested Citation

Manda, Vijaya Kittu and Polisetty, Aruna, Asset Quality & Risk Management Practices - An Analysis on Yes Bank (November 9, 2018). Available at SSRN: https://ssrn.com/abstract=3510944 or http://dx.doi.org/10.2139/ssrn.3510944

Vijaya Kittu Manda (Contact Author)

Gandhi Institute of Technology and Management (GITAM), Institute of Management ( email )

Rushikonda
Gandhi Nagar
Visakhapatnam, 530045
India
+919849519188 (Phone)

Aruna Polisetty

GITAM University, Visakhapatnam - Department of Finance ( email )

Visakhapatnam, Andhra Pradesh
India

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