Yes Bank sees corporate rivalry behind family feud

Moneycontrol Bureau

In yet another twist in the Yes Bank family feud, the bank's CEO and MD, Rana Kapoor had written a letter to Reserve Bank of India (RBI) in 2012 seeking declassification of Madhu Kapur who is the wife of late Ashok Kapur as a co-founder, CNBC TV18 reports.

After fighting a prolonging legal battle, the Yes Bank management on Friday also revealed an element of corporate rivalry in the entire episode. There could be a rival corporate involvement as far as this matter is concerned. They did not even rule out that perhaps this whole thing was instigated at the behest of one or two corporate houses, say the same report citing Yes Bank sources.

Also read: Here's how South Indian Bank expects to grow in FY14

No stopping...what's so interesting?

Since last two months the private sector lender has been hitting the headlines on this issue. The news mill has of late, started working overtime on it. However, the series of events has nothing to do with the bank's performance, say analysts tracking the bank.

Board membership was actually the root cause behind the 'conflagration' with routine media buzz. Two days back, Madhu Kapur filed an amended petition before the Bombay High Court challenging the corporate governance of the bank.

"This issue has been hogged to death. Whatever is happening in terms of family dispute, has got no relevance with Yes Bank's performance. It hardly matters whether Shagun Kapur joins the board as a member. It has now turned out to be an ego clash between Rana Kapoor and Madhu Kapur," an industry expert told moneycontrol.com on conditions of anonymity.

Looking back...

Earlier in June, Madhu Kapur filed a case against the Yes Bank alleging that her family was denied its right to be consulted on the appointment of three directors - Ravish Chopra, Diwan Arun Nanda and MR Srinivasan — on the bank's board as provided for in the bank's Articles of Association. Later, she had claimed a seat for her daughter Shagun Kapur Gogia in the bank's board.

Rivalry but with whom.....

In term of market capitalization, IndusInd Bank , Kotak Mahindra Bank and ING Vysya are its closest peers.

Yes Bank has just started building its retail base. Earlier it was known as a lender for corporates only. It hired Pralay Mondal, an astute banker specialized in retail, from HDFC Bank . On the contrary, its peers relatively have sizable base retail business. Yes Bank had obtained its banking licence in 2003 from the RBI along with the Kotak Bank.

An SOS to RBI or CCI....

Yes Bank management is reportedly considering two options right now. They may approach the Reserve Bank of India (RBI) trying to convince the central bank of a possible corporate hand. Alternatively, they would knock the door of competition commission of India (CCI).

Since last three months, Yes Bank shares rose more than 10 percent as against a meager rise of just 3 percent in the Bank Nifty the broader index for banking stocks.

saikat.das@network18online.com