Kumar set aside an hour a day during the first two months to call
depositors to reassure them personally about the bank's stability.
Late in the
evening of March 5, Prashant Kumar took an unexpected call from his boss at
State Bank of India. He was offered the job of rescuing the country’s most
troubled private-sector
bank, and -- if he accepted -- told to report for work at 8 a.m. the following
morning.
“The first thing that came to my mind was where was the address,” he recalled.
“I had to Google it.”
Kumar had little
hesitation in accepting the position of chief executive officer of YES
Bank Ltd., the lender that was teetering on the edge of insolvency before
being bailed out that month at a cost of $1.3 billion. The only concern came
from his wife, who Kumar says was “shocked” that he had resigned from his safe
post at the government-controlled SBI, where he was chief financial officer.
Another failure of
a financial institution would have been “catastrophic,” Kumar said of YES
Bank’s rescue, which came following the collapse of two shadow lenders. The
central bank organized a bailout led by SBI after YES Bank suffered a run on
deposits on concern about its massive bad-loan portfolio.
“Confidence of
people, customers and even employees was shaken,” Kumar said. “The bank had a
large stressed book. It was a very different challenge than handling money at
SBI.”
Since starting as
CEO, Kumar, 59, has made restoring the faith of YES Bank’s depositors a
priority. The bank suffered an outflow of Rs 1.04 trillion ($13.9 billion) in
the six months through March, about half its total deposits.
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