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Yes Bank Ltd.

BSE: 532648 | NSE: YESBANK |

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Series: EQ | ISIN: INE528G01035 | SECTOR: Banks - Private Sector

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Annual Report

For Year :
2021 2018 2017 2016 2015 2014 2013 2012 2011

Director’s Report

Your Directors are pleased to present the Seventeenth Annual Report on the business and operations of the Bank together with the audited financial statements (standalone as well as consolidated) for the financial year ended March 31,2021.


FY 2020-21 was the first year of the new journey of YES Bank under the new management post the Yes Bank Limited Reconstruction Scheme, 2020 (''Scheme) which was implemented in March 2020.

The new Board and management were entrusted with the responsibility of rebuilding the institution which had seen a sharp drop in deposits, customer trust and also had to face the consequences of the pandemic. The Bank had embarked on a transformation journey to emerge as a re-energized, recapitalized and recalibrated organization, by leveraging on a unique opportunity to learn from past challenges and become stronger, while continuing to fulfill its unwavering commitment towards its customers and stakeholders. The steps the Bank took included constant dialogue and deliberations with the regulators to timely resolve outstanding issues (for e.g. Special Liquidity Facilities from the Reserve Bank of India (RBI) as per requirement, de-classification of erstwhile Promoters with due regulatory approvals etc.), revamp of the Governance and Controls structure, identification and deepdiving into the quality of the loan book to recognize and provision for stress transparently and proactively, empowering and reinforcing trust and faith amongst the 21,000 strong workforce to work as one team again to rebuild the Bank in the face of the full blown impact of a Global Pandemic. These initiatives and efforts were critical to win back the confidence of the Bank''s stakeholders and investor community; and the resounding success of the FPO (one of the largest public capital raises in the history of Indian Capital markets) is a strong endorsement of stakeholder belief in the Bank''s management, business plan and strategy. The confidence of stakeholders has not only been seen through the improving financial performance of the Bank during the last year, but also through external validation in the form of Credit Rating upgrades, successful client win-backs and acquisition strategy, re-inclusion of the stock in marquee indices and increase in FII shareholding amongst others.

The Bank also undertook multiple initiatives to stabilize the Bank''s operations in the wake of COVID-19, while at the same slowly and selectively launching tailored propositions for its customers.

» Deepened customer relationship and wallet share for existing Bank customers, while focusing on attractive tailored propositions for new customers such as the newly launched Yes Premia program and Loan in Seconds

» Improved existing customer offering by re-vamping the Yes Online and Corporate Net banking platforms by making them more user friendly

» Enhanced digital customer sales and servicing model and enable remote interactions for key processes such as the launch of video KYC for account opening, WhatsApp Banking, remote payment service for merchants

» Kickstarted and/or implemented many key initiatives in customer personalization using Chatbots, data analytics, innovation in Cloud platforms, intelligent automation through robotics etc.

» The Bank also launched a massive brand building campaign Zimmedari se Tayyari which has gained significant digital traction and has been listed amongst the Top 10 ads on YouTube by ET Brand Equity.

The Bank continued its efforts towards building a stronger retail franchise with contribution of retail advances compared to total advances, increased to ~30 % in FY 2020-21 compared to 24% in FY 201920. Digitisation remains the Bank''s key pillar to grow the Retail, MSME and the Transaction Banking business. The Corporate advances have also started to pick up with focus on working capital financing to high rated corporates. The Bank believes that the legacy corporate stress has been adequately provided for in FY 2020-21. The Bank has significant presence within the new-age payments space with the highest market share of ~40.6% in UPI transactions (by volume) in FY 2020-21.


FY 2020-21 was a crucial milestone for the Bank in its onward journey, as the Bank battles the social and economic impact of COVID-19 on its operating model and simultaneously re-invents itself into a stronger, redefined organization. The Bank''s fundamentals continue to be strong and the Bank has emerged from the crisis as a financially sound, well capitalized, well governed institution, with customer centricity and digital at the heart of its strategy. The Bank remains focused on its priorities and looks to continue this momentum onwards and upwards so that it is able to deliver on its strategic objectives while creating superior value for all its stakeholders.

Key near term strategic objectives that the Bank has achieved and will further strengthen:

1. Rebuild capital, liabilities and liquidity buffers

2. Cost optimisation

3. Stronger governance and underwriting frameworks

4. Focused stressed assets resolution

Medium term

1. Stable liability mix and lower cost of funds: CASA Ratio>40%

2. Granular advances: Retail/MSME>60%

3. Corporate flows and cross sell through Transaction Banking

4. ROA>1% by FY23 and ROA>1.5% by FY25


For the new financial year, shareholders may expect the following:

» Infrastructure and growth push by the Government to provide the right impetus for a sustainable credit opportunity in the economy » Market share improvement for banks with strong parentage » Enhanced usage of digital as a key enabler in customer experience » Structural shift in household savings from physical to financial assets


('' in million)


April 1, 2020 to March 31, 2021

April 1, 2019 to March 31, 2020














Total Assets/Liabilities




Net Interest Income




Non Interest Income




Operating profit




Provisions and Contingencies




Profit before Tax




Provision for taxes




Net Profit/(Loss) from Ordinary Activities after tax




Extraordinary income (net of tax)- Tier 1 write down








('' in million)


April 1, 2020 to March 31, 2021

April 1, 2019 Change to March 31,


Add: Surplus/(Deficit) brought forward from last period


107,595.60 (176,569.48)

Amount available for appropriation


(56,584.71) (47,011.43)


Statutory Reserve under section 17 of the Banking Regulation Act, 1949


- -

Capital Reserve


6,655.51 (1,685.75)

Investment Reserve


147.23 6.47

Investment Fluctuation Reserve


- -

Dividend and Dividend Tax paid


5,586.43 (5,586.43)

Surplus carried to Balance Sheet


(68,973.88) (39,745.73)

Key Performance Indicators (excluding Tier 1 write down

Net Interest Margin



Return on Annual Average Assets



Return on Equity



Cost to Income Ratio



Your Bank posted Net Loss of ''34,622.27 million in FY 2020-21 as compared to a loss of ''164,180.31 million for FY 2019-20 mainly due to higher provisioning. Net Interest income (NII) of the Bank increased by 9.2% to ''74,286.02 million during FY 2020-21 as compared to ''68,052.31 million during FY 2019-20. The Net Interest Margin (NIM) was 2.8% in FY 2020-21. Your Bank posted a healthy operating profit growth of 41.5% to ''49,773.07 million. Appropriations from the Net Profit have been effected as per the table given above. Please refer to the section on Financial and Operating Performance in the Management Discussion and Analysis for a detailed analysis of financial data.


The Reserve Bank of India (''RBI'') through circular dated April 22, 2021 allowed banks to pay dividend on equity shares from the profits for the financial year ended March 31,2021, subject to the quantum of dividend being not more than fifty percent of the amount determined as per the dividend payout ratio prescribed in the paragraph 4 of the RBI circular dated May 4, 2005. However, during FY 2021, the Bank has reported a loss and as consequence to that the Bank has not declared any dividend.

The RBI, vide notification dated December 4, 2020, stated that in view of the ongoing stress and heightened uncertainty on account of COVID-19, the banks should continue to conserve capital to support the economy and absorb losses. The notification also stated that in order to further strengthen the banks'' balance sheets, while at the same time support lending to the real economy, banks shall not make any dividend payment on equity shares from the profits pertaining to the financial year ended March 31,2020.

As required under Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) the dividend policy of your Bank is available on the Bank''s website at the link:


As per requirement of RBI regulations, the Bank has transferred the following amounts to various reserves during Financial Year ended March 31,2021:

Amount transferred to

'' million

Statutory Reserve (The Bank incurred a net loss of ''34,622.27 million in FY 2020-21) Capital Reserve Investment Reserve




In accordance with the applicable provisions of the Companies Act, 2013 read with Rules made thereunder, during the FY 2020-21, the Bank has transferred to the credit of the Investor Education and Protection Fund (''IEPF'') administered by the Central Government, 29,797 number of equity shares and unpaid dividend amount of ''1,366,140.00, which had remained unclaimed/ unpaid for a period of seven (7) consecutive years.


During FY 2020-21 the Bank has successfully completed capital raising of ''150,000.00 million by way of Further Public Offering (''FPO'') by issue and allotment of 12,504,433,750 equity shares of face value of ''2 each at a price of ''12 per Equity Share for cash (discount of ''1 per Equity Share was offered for employee reservation portion).

The Issue was made through book building process in accordance with regulation 129(1) of the SEBI ICDR Regulations.

The Bank has not issued any equity shares with differential voting rights during the year.

During the year under review, the Bank has not issued any shares pursuant to the exercise of stock options. Movement in Share Capital

('' in million)

Share Capital

As at

As at

March 31, 2021

March 31, 2020

Opening Share Capital



Addition due to exercise of Stock Option



Addition due to shares issued for QIP/FPO



Addition due to shares issued under Reconstruction scheme



Closing Share Capital



With the above capital raise, Capital Adequacy Ratio of your Bank significantly improved to 17.5% as at March 31, 2021 as compared to 8.5% as at March 31, 2020. CET-1 ratio comfortable stood at 11.2%, Tier I Capital Ratio at 11.3% and Tier II Capital Ratio was 6.2% as at March 31,2021.


The Management Discussion and Analysis Report for the year under review as stipulated in Listing Regulations is presented in a separate section forming part of the Annual Report.


The Bank''s Enterprise Risk Management framework encompasses the following:

» Risk Governance Framework: The Bank has implemented an Enterprise Risk Governance framework to ensure non-silo based management and oversight of Risk. The Bank''s Risk Management philosophy is guided by the Three Lines of Defence:

- First Line of Defence - Business Management: : Each business segment of the Bank has risk ownership and is responsible for assessment and management of risks and has the overall responsibility of the management and mitigation of the Risk. The segments are required to

- Second Line of Defence - Independent functions: The Bank''s independent oversight functions, such as, Risk Management, Credit Underwriting, Compliance, Legal, Fraud Containment Unit, etc. set standards for management and oversight of risks, including compliance with applicable laws, regulatory requirements and policies.

• Risk Management: Risk Management establishes policies and guidelines for risk assessment and management and contributes to controls and tools to manage, measure and mitigate risks faced by the Bank. Risk Management comprises units such as Enterprise Risk, Credit Risk Policy Unit, Market Risk, Operational Risk, Legal Risk, Information Security, Portfolio Analytics Unit, Retail, SME & Rural Policy Unit and Portfolio Management Unit which are responsible for independent review, monitoring and reporting of all risk control parameters and taking appropriate corrective actions where necessary. These units also ensure compliance to internal policies and regulatory guidelines.

• Credit Underwriting: The Credit team ensures an independent assessment of credit proposals and is responsible for monitoring the credit quality of the Bank''s portfolio and undertaking portfolio reviews.

• Compliance: The Compliance unit is responsible for tracking implementation of all regulatory circulars/communication, review of new products & processes from regulatory perspective, conducting compliance reviews to ensure adherence to regulatory guidelines and monitoring progress in rectification of significant deficiencies (if any) pointed out by regulators in inspection reports as well as implementation of recommendations made therein. This ensures that the overall Compliance Risk of the Bank is managed and mitigated.

• FCU & AML: The Fraud Containment Unit (FCU) is responsible for prevention and detection of internal and external frauds in the areas of Liabilities, Product and Support functions. The unit conducts transaction monitoring, forensic scrutiny, employee awareness trainings and vulnerability assessments to help achieve the said objective. The Anti Money Laundering Unit (AML) is responsible for identifying and reporting of suspicious transactions and other regulatory reports such as Cash Transaction Report, Cross Border Wire Transfer Report, Not for Profit Organisation Transaction report etc as prescribed under PMLA Act/Regulators, across allBusiness segments of the Bank. The AML unit is equipped with qualified, trained and experienced staff, which monitors various transactions undertaken by customers with a view to combat financial crimes and prevents misuse of the accounts for money laundering.

- Third Line of Defence - The Bank''s Internal Audit function independently reviews activities of the first two lines of defence based on a risk-based audit plan and methodology approved by the Audit Committee of the Board. Internal Audit provides independent assurance to the Board, the Audit Committee, senior management and regulators regarding the effectiveness of the Bank''s governance and controls framework designed for risk mitigation.

The Board of Directors of the Bank has overall responsibility for Risk Management. The Board oversees the Bank''s Risk and related control environment, reviews and approves the policies designed as part of overseeing the Risk Management practices. The Board ensures that comprehensive policies, systems and controls are in place to identify, monitor and manage material risks at a Bank-wide level, with clearly defined risk limits. The Board has laid down Risk Appetite Statement which articulates the quantum of risk the Bank is willing and able to assume in its exposures and business activities in pursuit of its strategic objectives and desired returns. The Board has also established policies governing risk management, such as, Credit Policy, Asset Liability Management Policy, Operational Risk Management Policy, Information Security Policy, Enterprise Risk Management Policy, Group Risk Management Policy, Model Risk & Governance Policy, Risk Based Pricing Policy, Stress Testing Policy, etc. which establish the Risk Appetite Framework within the overall Risk Appetite Statement.

The Board has put in place four Board level Committees which inter-alia pertain to Risk Management, viz. Risk Management Committee (RMC), Audit Committee (AC), Fraud, Willful Defaulters and Non Co-operative Borrowers Monitoring Committee (FWD & NCBMC) and Board Credit Committee (BCC) to deal with risk management practices, policies, procedures and to have adequate oversight on the risks faced by the Bank.

The Board Committees have set up various Executive level committees for oversight over specific risks.

1. Apex Management Committee

2. Enterprise Risk, Reputation Risk and Model Assessment Committee

3. Management Credit Committee

4. Executive Credit Committee

5. Asset & Liability Management Committee

6. Operational Risk Management Committee

7. Standing Committee on Customer Service

8. Fraud & Suspicious Transaction Monitoring Committee

9. Committee for Classification of Willful Defaulters & Non Co-operative Borrowers

10. Accountability Review Committee

11. Whistle Blower, Disciplinary and Internal Committee

12. Steering Committee for IFRS (Ind AS)

13. Product Process Approval Committee

14. IT Steering Committee

15. Security Council

16. Stressed Asset Monitoring Committee

17. Sustainability Council

18. Fraud Investigation Committee

These Committees review various aspects / key risks and ensure that the best-in-class frameworks are in place to oversee day-to-day management of underlying business activities, transactions and associated risks while dealing with internal and external stakeholders. Further, Risk events, potential threats, performance of the Bank vis-a-vis Risk Limits and Risk Appetite, Risk Profile dashboard covering key risk indicators, etc. are presented to these Committees, with periodic trends highlighted along with level and direction of risk. The Bank also conducts a detailed Internal Capital Adequacy Assessment Policy (''ICAAP'') review exercise to identify its Risk universe, review its Risk appetite in line with its business strategy as well as assess its internal controls and mitigation measures in place for the risks and capital requirements. The ICAAP document is approved by the RMC and the Board.

Additionally, in line with best Risk Governance practices, the Bank has segregated credit underwriting and risk management verticals. The underwriting vertical consisting of Credit Units is headed by the Chief Credit Officer (CCO) and the risk controls and policy vertical consisting of various independent control units is headed by the Chief Risk Officer (CRO). The CRO reports to the Risk Management Committee while the CCO reports to the MD&CEO.


Being a banking company, the disclosures required as per Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014, read with Sections 73 and 74 of the Companies Act, 2013 are not applicable to your Bank.


In terms of the RBI circular no. DBR.BP.BC.No.32/21.04.018/2018-19 dated April 1, 2019, Banks are required to disclose the divergences in asset classification and provisioning consequent to RBI''s annual supervisory process in their notes to accounts to the financial statements, wherever either or both of the following conditions are satisfied: (a) the additional provisioning for NPAs assessed by RBI exceeds 10 per cent of the reported profit before provisions and contingencies for the reference period and (b) the additional Gross NPAs identified by RBI exceed 15 per cent of the published incremental Gross NPAs for the reference period. Based on the above, no disclosure on divergence in asset classification and provisioning for NPAs is required with respect to RBI''s annual supervisory process for FY 2019-20.

Disclosure on Complaints

The Bank became aware in September 2018 through communications from stock exchanges of anonymous whistleblower complaints alleging irregularities in the Bank''s operations, potential conflict of interest of the founder / former MD & CEO and allegations of incorrect NPA classification. The Bank conducted an internal enquiry of these allegations, which was carried out by management and supervised by the Board of Directors. The enquiry resulted in a report that was reviewed by the Board in November 2018. Based on further inputs and deliberations in December 2018, the Audit Committee of the Bank engaged an external firm to independently examine the matter. In April 2019, the Bank had received the phase 1 report from the external firm and based on further review/ deliberations had directed a phase 2 investigation from the said firm. In February 2020, the Bank has received the final phase 2 report from the said external firm. The Bank has taken this report to the Audit Committee. As advised by the Audit Committee, the Bank has reviewed and carried out remediation actions across areas of process, design, policy and control related issues highlighted in the report including conducting forensic audits for few of the identified borrower accounts. The forensic audits for remaining accounts are in the process. Basis guidance from the ACB during the year, further action has been taken and a comprehensive note was put up to the Board on January 15, 2021 for closure of the report. The Board expressed satisfaction with the review carried out and approved the closure of the review of the anonymous complaints received by the Bank in September / December 2018. Exposure to such borrower accounts are recognized as NPA and commensurately provided.

Further, the Bank received forensic audit reports on certain borrower groups commissioned by other consortium bankers, which gave more information regarding the above mentioned allegations and

has filed complaints with the law enforcement agencies. Also, Law Enforcement Agencies (LEAs) -the Enforcement Directorate (ED), the Central Bureau of Investigations (CBI) and the Serious Fraud Investigation Office (SFIO) have launched investigations into some aspects of transactions of the founder / former MD & CEO, and alleged links with certain borrower groups. LEAs are investigating allegations of money laundering, fraud and nexus between the founder / former MD & CEO and certain loan transactions. The investigation continues to be carried out by the various law enforcement agencies. There are no claims made by any whistleblower or other parties against the Bank in this matter. The Bank does not foresee any substantial financial impact on the Bank arising out of these investigations.


As on March 31, 2021, the Bank had three wholly-owned subsidiaries, YES Securities (India) Limited (''YSIL''), YES Asset Management (India) Limited (''YAMIL'') and YES Trustee Limited (''YTL'').

The Bank does not have any material subsidiary, associate and joint venture company.

Performance and Financial Position of YSIL, YAMIL and YTL is given in Management Discussion & Analysis which forms part of this Annual Report.

The brief details about business of the subsidiaries are as under:

YES Securities (India) Limited (YSIL)

YES Securities (India) Limited (YSIL) offers retail, HNI and corporate customers a comprehensive range of products and services, encompassing Wealth Broking, Investment Advisory, Investment Banking (including a dedicated Sustainable Investment Banking practice), Merchant Banking, Research and Institutional Equities services. YSIL is a SEBI registered Stock Broker holding membership of National Stock Exchange (NSE), Bombay Stock Exchange (BSE), Multi Commodity Exchange (MCX) & National Commodity & Derivatives Exchange (NCDEX). YSIL is also a SEBI-registered Category I Merchant Banker, Investment Adviser and Research Analyst.

YES Asset Management (India) Limited (YAMIL) & YES Trustee Limited (YTL)

YES Asset Management (India) Limited (YAMIL) and YES Trustee Limited (YTL) were incorporated as wholly owned subsidiaries on April 21, 2017 and May 3, 2017, respectively to carry on mutual fund business.

On August 21,2020, YBL entered into a definitive agreement to sell its 100% stake in YAMIL and YTL to GPL Finance and Investments Ltd (Purchaser). White Oak Investment Management Pvt Ltd. owns 99% of the Purchaser. The ultimate beneficial owner of the Purchaser is Mr. Prashant Khemka who owns 99.99% of the White Oak Investment Management Pvt Ltd. The transaction is expected to be completed in FY 2021-22.

YAMIL currently has 3 schemes and the average AUM for FY 2020-21 was ''95.04 crores.

The Consolidated Financial Statements of the Bank and its Subsidiaries prepared in accordance with the requirement of Section 129(3) of the Companies Act, 2013 shall be laid before the ensuing AGM and it forms part of this Annual Report.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing salient features of Financial Statements of subsidiaries in Form AOC-1 forms part of the Annual Report. The Financial Statements of the subsidiaries of the Bank are available on the website of the Bank ( Financials of Bank and its subsidiaries shall also be available for inspection by members or trustees of the holders of any debentures/bonds of the Bank at its Registered office.


The Bank has implemented adequate procedures and internal controls which provide reasonable assurance regarding reliability of financial reporting and preparation of financial statements. The Bank also ensures that internal controls are operating effectively.


Except as disclosed below, there are no material changes and commitments, affecting the financial position of the Bank which has occurred between the end of the financial year of the Bank i.e. March 31,2021 and the date of the Directors'' Report i.e. June 10, 2021.


The SARS-CoV-2 virus responsible for COVID-19 started spreading across the globe and India in March 2020, which has contributed to a significant decline and volatility in global and Indian financial markets and a significant decrease in global and local economic activities. Due to outbreak of the

COVID-19 pandemic, the country had witnessed lockdowns across India, imposed by the Indian government from March 2020. Subsequently, the national lockdown was lifted by the government, but regional lockdowns continue to be implemented in areas with a significant number of COVID-19 cases. The current second wave of Covid-19 pandemic, where the number of new cases has increased significantly in India, has resulted in re-imposition of localised/regional lockdown measures in various parts of the country.

RBI issued guidelines on COVID-19 Regulatory Packages under which, the Bank granted a moratorium of three months (further extended by three months) on the payment of all instalments and / or interest, as applicable, falling due between March 1,2020 and August 31,2020. For all such accounts where the moratorium was granted, the asset classification shall remain stand still during the moratorium period (i.e. the number of days past-due shall exclude the moratorium period for the purposes of asset classification under the Income Recognition, Asset Classification and Provisioning norms) has been retained based on the overdue status as at February 29, 2020.

The Supreme Court, in a public interest litigation (Gajendra Sharma Vs. Union of India & Anr), through its interim order dated September 3, 2020 had directed that accounts which were not declared as NPA till August 31,2020 shall not be declared as NPA till further orders. Accordingly, the Bank did not classify any account which was not NPA as of August 31,2020 as per the RBI IRAC norms, as NPA after August 31, 2020. The Bank had made contingency provision of ''2,683 crore till December 31, 2020. The interim order granted to not declare accounts as NPA stood vacated on March 23, 2021 vide the judgement of the Hon''ble SC in the matter of Small Scale Industrial Manufacturers Association vs. UOI & Ors. and other connected matters. Further in accordance with the instructions in paragraph 5 of the RBI circular dated April 07, 2021 issued in this connection, the Bank has classified such borrower accounts as per the extant IRAC norms with effect from September 1,2020 and utilised the above contingency provisions towards provision on these accounts.

Refer Financial Statement - 18.5.1 and Notes to Accounts disclosure 18.6.24 for offerings under COVID package in line with the extant regulatory guidelines and Disclosure under COVID19 Regulatory Package.

Further, the Bank is closely monitoring the potential impact of COVID on its borrowers and is engaging with them for suitable resolutions and relaxations in line with RBI guidelines.


The Credit Rating and change/revision in the Credit Ratings for various debt instruments issued by the Bank from time to time are provided in the Corporate Governance Report forming part of the Annual Report.


Pursuant to Section 186(11) of the Companies Act, 2013, loans made, guarantees given or securities provided or acquisition of securities by a Banking company in the ordinary course of its business are exempted from disclosure requirements under Section 134(3) (g) of the Companies Act, 2013.


There were no materially significant transactions with related parties including promoters, directors, key managerial personnel, subsidiaries or relatives of the Directors during the financial year which could lead to a potential conflict with the interest between the Bank and these parties. The details of the transactions with related parties, if any, were placed before the Audit Committee from time to time. There were no material individual transactions with related parties, which were not in the ordinary course of business of the Bank, nor were there any transactions with related parties, which were not at arm''s length basis. Accordingly, the disclosure in Form AOC-2 is not applicable to the Bank for the year under review. Suitable disclosure as required by the Accounting Standards (AS-18) has been made in the notes to the Financial Statements.

Prior omnibus approval for normal banking transactions is also obtained from the Audit Committee for the related party transactions which are repetitive in nature as well as for the normal banking transactions which cannot be foreseen and accordingly the required disclosures are made to the Committee for their approval.

The policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Bank and can be accessed at


During the FY 2020-21, Mr. Partha Pratim Sengupta and Mr. SwaminathanJanakiraman, Non-Executive Directors, nominated by State Bank of India resigned from the directorship of the Bank w.e.f. July 24, 2020 and October 28, 2020 respectively. In place of resigned directors, Mr. Vadalur Subramanian Radhakrishnan and Mr. Ravindra Pandey were appointed as SBI Nominee Directors on the Board of the Bank w.e.f. July 31,2020 and November 3, 2020 respectively. Their nomination on the Board will be valid till such period as per the Scheme or January 31,2023 and June 30, 2022, respectively.

As you are aware, pursuant to the Yes Bank Reconstruction Scheme, 2020 (Scheme) nomination made by State Bank of India and Order passed by RBI under Banking Regulation Act, 1949 (BR Act)

the new Board of Directors was constituted with effect from March 26, 2020. As per the Scheme, the members of the Board, other than the additional directors (appointed by RBI u/s 36AB of BR Act), shall continue in office for a period of one year, or until an alternate Board is constituted by reconstructed bank in accordance with the procedure laid down in its memorandum and articles of association, whichever is later. Accordingly, necessary process has already been initiated by the Bank for identifying directors with appropriate skill sets and expertise on the Board of the Bank for constitution of the alternate Board. The appointment of directors will be subject to required approvals, including approval of the members.

Key Managerial Personnel

During the year, Mr. Niranjan Banodkar was appointed as Chief Financial Officer (''CFO'') and Key Managerial Personnel w.e.f. January 1,2021 in place of Mr. Anurag Adlakha CFO and Key Managerial Personnel who has assumed the role of Chief Human Resources Officer (''CHRO'') of the Bank.

Mr. Prashant Kumar continues to be the MD & CEO of the Bank as per the Scheme notified by the Ministry of Finance, Government of India under Notification No. G.S.R. 174(E) dated March 13, 2020.

Mr. Shivanand Shettigar continued to act as Company Secretary and the Key Managerial Personnel.


Pursuant to the Scheme through which the new Board was appointed, none of the Directors are designated as Independent Directors. Hence, the Bank is not required to obtain declarations under Section 149(6) and 149(7) of the Companies Act, 2013 and Regulation 16(1)(b) and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''Listing Regulations'').

However, given the present composition of the Board, wherein presently there are three NonExecutive Directors viz. Mr. Sunil Mehta, Mr. Mahesh Krishnamurti and Mr. Atul Bheda, appointed pursuant to the Scheme, not holding any substantial interest in the share capital nor having any pecuniary relationship with the Bank and meets the criteria of independence, accordingly necessary declarations were obtained from them, confirming that they meet the criteria of independence.


None of the Directors appointed under the Scheme are designated as Independent Directors, therefore the statement regarding opinion of the board with regard to integrity, expertise and experience (including the proficiency) of the independent directors is not applicable.


The programs undertaken for familiarizing the Independent Directors are disclosed in detail in the Corporate Governance Report, which forms part of the Annual Report.


The details of Board meetings held during the year, attendance of Directors at the meetings and constitution of various Committees of the Board are included separately in the Corporate Governance Report, which forms part of the Annual Report.


The Bank has laid down criteria for performance evaluation of the Directors including Chairman, Managing Director & CEO, Board Level Committees and Board as a whole as well as the evaluation process for the same, in line with the provisions of the Companies Act, 2013, Listing Regulations and SEBI Guidance Note on the Board Evaluation dated January 5, 2017. The present Board of Directors of the Bank was constituted in accordance with the Scheme, wherein two Board Members are the Additional Directors appointed by the RBI pursuant to Section 36AB of Banking Regulation Act, 1949. As per the RBI letter No. DoR.PSBD.No.325/16.05.004/ 2020-21 dated August 24, 2020, Additional Directors appointed by RBI are not subject to performance evaluation. Given the present composition of the Board under the Scheme, the Bank was not required to mandatorily comply with the stipulated procedure of Performance Evaluation for FY 2020-21. However, as a matter of good governance, the Board decided for carrying out the Performance Evaluation of the Directors, excluding the Additional Directors appointed by RBI, for the Financial Year 2020-21, in an appropriate manner.

Accordingly, the process for carrying out the performance evaluation of the members of the Board, the Board Level Committees and the Board as a whole was initiated by the Bank post completion of FY 202021 and the Board of Directors had deliberations and also had informal interactions in this regard. The performance evaluation process would be completed in due course.


The Board of Directors of the Bank had formulated and adopted policy on Board Diversity and Fit & Proper Criteria and Succession Planning for appointment of Directors on the Board of the Bank and succession planning. The details of the same have been included in the Report on Corporate Governance forming part of this Annual Report.


The Board of Directors of the Bank had formulated and adopted policies for Remuneration of Employees of the Bank, Remuneration of Directors including the Chairman of the Bank. The details of the same are made available on the Bank''s website and can be accessed at pdf/board_kmp_sr_mgmt_remuneration_policy_pdf.


(a) The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report. In terms of Section 136 of the Companies Act, 2013, the same would be available for inspection during working hours at the Registered Office of the Bank till the date of Annual General Meeting. A copy of this statement may be obtained by the Members by writing to the Company Secretary of the Bank.

(b) The ratio of the remuneration of each Director and employees of the Bank as required under the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure 1 to the Report.


Your Bank has instituted Stock Option Plans to enable its employees to participate in your Bank''s future growth and financial success. In terms of compensation and benefit policy of the Bank, employees are granted options as part of Annual Performance Review process based on their performance

as well as to ensure their retention, and to hire the best talent for its senior management and key positions. The Employee Stock Option Scheme was amended as approved by the members of the Bank at the previous annual general meeting held on September 10, 2020 and the Stock Exchanges i.e National Stock Exchange and BSE Limited have granted necessary approval for such amendment on November 24, 2020 and January 06, 2021 respectively. The details of Employee Stock Option Schemes and related statutory disclosures are provided in Annexure 2 to this report.


The Bank is committed to follow best Corporate Governance practices and adheres to the Corporate Governance requirements set by the Regulators under the applicable laws/regulations. In line with the foregoing, the Bank has adopted a Code of Corporate Governance which acts as a guide to the Bank and the Board on the best practices in the Corporate Governance.

A separate section on Corporate Governance standards followed by the Bank and the relevant disclosures, as stipulated under Listing Regulations, Companies Act, 2013 and rules made thereunder forms part of the Annual Report.

A Certificate from M/s. Bhandari & Associates, Practicing Company Secretaries, conforming compliance by the Bank to the conditions of Corporate Governance as stipulated under Listing Regulations, is annexed to the Report on Corporate Governance, which forms part of the Annual Report.


In line with the provisions of Listing Regulations, the Companies Act, 2013 and the principles of good governance, the Bank has devised and implemented a vigil mechanism, in the form of ''Whistle-Blower Policy''. The policy devised is also aligned to the recommendations of Protected Disclosure Scheme for Private Sector and Foreign Banks, instituted by RBI. Detailed information on the Vigil Mechanism of the Bank is provided in the Report on the Corporate Governance which forms part of the Annual Report.


In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Bank has constituted Corporate Social Responsibility (''CSR'') Committee and statutory disclosures with respect to the CSR Committee and Annual Report on CSR Activities forms part of this Report as Annexure 3. The CSR Policy is available on the website of the Bank and can be accessed at


A. Statutory Auditors

In terms of Section 139 of the Companies Act, 2013, M/s M P Chitale & Co., Chartered Accountants (ICAI Firm Registration Number 101851W), were appointed as statutory auditors of the Bank for a period of four years from the conclusion of 16th AGM till the conclusion of 20th AGM of the Bank, subject to the annual approval of the Reserve Bank of India (RBI).

Further, in terms of the RBI Guidelines for Appointment of Statutory Central Auditors (SCAs)/Statutory Auditors (SAs) of CommercialBanks (excluding RRBs), UCBs and NBFCs (including HFCs) dated April 27, 2021, in order to protect the independence of the auditors/audit firms, entities will have to appoint the SCAs/SAs for a continuous period of three years, subject to the firms satisfying the eligibility norms each year. Further, the audit firms which have already completed tenure of 1 year with any entity may be permitted to complete the balance tenure only, i.e. 2 years and for Entities with asset size of ''15,000 crore and above as at the end of previous year, the statutory audit should be conducted under joint audit of a minimum of two audit firms [Partnership firms/Limited Liability Partnerships (LLPs)].

Thus in terms of the aforesaid RBI Guidelines, M/s M P Chitale & Co., Chartered Accountants (ICAI Firm Registration Number 101851W) will be eligible to hold office only up to the 19th AGM subject to fulfillment of eligibility norms on an annual basis.

Accordingly, the Board of Directors has recommended to RBI the appointment of M/s M P Chitale & Co., Chartered Accountants (ICAI Firm Registration Number 101851W) as the Statutory Auditors of the Bank for a period of two years from the conclusion of 17th AGM till the conclusion of 19th AGM, at the ensuing AGM and their appointment will be subject to approval by RBI on an annual basis under above-mentioned RBI circulars.

Further the Board of Directors has recommended to RBI names of seven Audit firms in the order of preference, wherein M/s. Chokshi & Chokshi LLP, Chartered Accountants, (ICAI Firm Registration No. 101872W /W100045), as the first preference for appointment as Joint Statutory Auditors of the Bank, for a period of three years from the conclusion of 17th AGM till the conclusion of the 20th AGM, at the ensuing AGM and their appointment will be subject to approval by RBI on an annual basis under above-mentioned RBI circulars.

Qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report

The Report given by the Statutory Auditors on the Financial Statements of the Bank for the financial year ended on March 31, 2021 forms part of this Annual Report. The auditors of the Company have given an unmodified opinion as mentioned in the Auditors'' Report.

The audit report for the Financial Year ended March 2020 was qualified because of material uncertainty related to Going Concern. The opinion was predicted on a significant decline in Bank''s deposit base, credit downgrades resulting in partial prepayment of foreign currency debt linked to external credit rating, breaches in liquidity ratios and RBI mandated Capital ratios.

During the current year, the Bank raised capital of ''150,000 million through FPO in July 2020. As a consequence, Bank''s capital ratio stands at 17.5% as on March 31, 2021 as against a minimum requirement of 10.875%. Further, Bank has increased its deposit position by 54.7% to ''1,629,466 million while also improving the LCR well in excess of the minimum regulatory thresholds.

Given the capital raise, reinforced capital buffers, strong growth in deposit base, the Banks'' compliance with regulatory ratios and expanding customer and branch network, the audit report for FY 2020-21 is not modified.

Also, no offence of fraud was reported by the Auditors of the Bank.

B. Secretarial Auditors and Secretarial Audit Report

Pursuant to Section 204 of the Companies Act, 2013, M/s. Bhandari & Associates, Practicing Company Secretaries, Mumbai were appointed as Secretarial Auditors of the Bank to conduct the secretarial audit for the FY 2020-21. The Bank provided all assistance and facilities to the Secretarial Auditors for conducting their audit. The Report of Secretarial Auditors for the FY 2020-21 is annexed to this report as Annexure 4. There are no observations, reservations or adverse remarks in the Secretarial Audit Report.


Being a Banking Company, the Bank is not required to maintain cost records as per sub-section (1) of Section 148 of the Companies Act, 2013.


As stipulated in Listing Regulations, the Business Responsibility Report describing the initiatives undertaken by the Bank from environmental, social and governance perspective is separately attached as part of the Annual Report.


During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Bank''s operation in future.


Green Bonds have emerged as a mainstream financing mechanism for providing structured finances to vital clean energy and are playing a pivotal role in realization of India''s renewable energy potential. Since the maiden issuance by YES BANK, the Green Bonds market has witnessed a steady growth and is currently pegged at over USD 10 billion. Driven by the commitment of mobilizing USD 5 billion towards climate action by 2020, as taken during Paris Accord, YES BANK has issued three green bonds:

» February 2015: The Bank issued India''s first-ever Green Infrastructure Bonds, raising an amount of INR 1000 crore. This 10 year tenor bond witnessed strong demand from leading investors including Insurance companies, Pension & Provident Funds, Foreign Portfolio Investors, New Pension Schemes and Mutual Funds

» August 2015 : The Bank raised INR 315 crore through the issue of Green Infrastructure Bonds to International Finance Corporation (IFC) on a private placement basis which is the first investment by IFC in an Emerging Markets Green Bond issue in the world. The bonds are for a tenor of 10 years. IFC paid for the placement using the proceeds from the first Green Masala Bond program, that aimed at raising capital in the offshore rupee market

» December 2016: The Bank has raised INR 330 crore, through an issue of a 7-year Green Infrastructure Bonds to FMO, the Dutch Development Bank, on a private placement basis. This is FMO''s 1st investment in a Green Bond issued by a bank in India. FMO has paid for the placement using the proceeds from their sustainability bonds issued in 2015

The amount raised was used to finance Green Infrastructure Projects as per ''Eligible Projects'' outlined in the Bank''s internal guidelines that are in adherence to the Green Bond Principles (GBP). For FY 2020-21, KPMG, India has provided limited assurance on conformity of the use of proceeds, process for evaluation and selection of projects, management of proceeds and reporting of these green bonds to GBP 2018.

The GBP are voluntary guidelines, developed by the International Capital Markets Association, for broad use by the market that recommend transparency and disclosure, and promote integrity in the development of the Green Bond market. They have the following four key components and the bank showcases its adoption below:

» Use of Proceeds: The proceeds raised by the bank are used in eligible project categories and include all projects funded in whole, or in part, in the fields of renewable and clean energy projects including Wind, Solar, Biomass, Hydropower and other such projects.

» Process for Evaluation and Selection of Eligible Projects: The Bank''s process starts with interactions with potential borrowers to understand the overall aspects of the project and a preliminary confirmation against the eligibility criteria. The evaluation moves to risk assessment for confirmation of the eligibility, post which further documentation is sought as per the Bank''s policies and GBP.

» Management of Proceeds: Green Bond allocations to eligible projects are tracked by the Bank through an MIS based asset tagging system. The unallocated proceeds, if any, are placed in liquid instruments.

» Reporting: The bank''s communication to investors through an annual update includes:

• List of projects to which proceeds have been allocated to, with brief description including amounts disbursed, installed capacity

• Summary of Environment and Social (E&S) impacts associated with projects, if any

• Information on investment of unallocated proceeds in liquid instruments


Through financing solar and wind power plants, these bonds strengthen India''s energy security while reducing fossil fuel dependency. These bonds have been crucial in financing climate change mitigation with avoidance of emissions of CO2, SO2, NOx and other air pollutants associated with fossil fuel based energy generation. Estimated CO2 emission reductions are shared along with project details.

List of projects against which green bonds proceeds have been allocated as on 31st March, 2021 is provided below:

Proceeds Utilization* Against Bond Issuance Size of INR 1,000 Cr (February 2015)






Total Fund Based Utilization, INR Cr

Estimated** positive E&S impacts - CO2 Emission Reduction (tCO2e / yr)

Known significant negative E&S Impacts



31.5 MW wind energy project






42 MW solar energy project






40 MW solar energy project




Proceeds Utilization* Against Bond Issuance Size of INR 1,000 Cr (February 2015)






Total Fund Based Utilization, INR Cr

Estimated** positive E&S impacts - CO2 Emission Reduction (tCO2e / yr)

Known significant negative E&S Impacts



48 MW solar energy project







92 MW wind energy project






50.4 MW wind energy project







27.3 MW wind energy project







29.4 MW wind energy project






50 MW solar energy project






3.26 MW rooftop solar installation across 9 locations






15 MW wind energy project






10 MW wind energy project






8.75 MW wind energy project






9 MW wind energy project





Andhra Pradesh & Rajasthan

105 MW & 50.4 MW wind energy project




Proceeds Utilization* Against Bond Issuance Size of INR 330 Cr (December 2016)






Total Fund Based Utilization, INR Cr

Estimated** positive E&S impacts - CO2 Emission Reduction (tCO2e / yr)

Known significant negative E&S Impacts



30 MW wind energy project






300 MW solar energy project







66 MW wind energy project






6.25 MW wind energy project






9.6 MW wind energy project







100 MW wind energy project




* The temporary unallocated proceeds (INR 315 Cr of bond Issued In August 2015) have been Invested In Government Securities. In bilateral discussion with investor for allocation to eligible projects.

** The total CO2 emission reduction for individual projects have been calculated based on the methodology outlined in the document ''CO2 Baseline Database for the Indian Power Sector User Guide Version 15.0 dated December 2019'' (published by the Central Electricity Authority of India) along with other relevant factors such as project PLF/CUF estimates, installed project capacity, resultant annual unit generation etc.

The assurance statement issued by KPMG India is attached as Annexure 5 to this report.


The disclosures required to be made under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 on the conservation of energy, technology absorption and Foreign exchange earnings and outgo are given as Annexure 6.


Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, the Company has placed a copy of the Annual Return as at March 31,2021 on its website at investors-relation/financial-information/annual-reports.


Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, it is hereby confirmed that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;


The Board of Directors affirm that the Bank has complied with the applicable Secretarial Standards issued by the Institute of Companies Secretaries of India (SS1 and SS2) respectively relating tc Meetings of the Board, its Committees and the General Meetings.


The Bank has Zero tolerance towards any act on the part of any executive which may fall under the ambit of ''Sexual Harassment'' at workplace and is fully committed to uphold and maintain the dignity o every women executive working in the Bank. The Policy regarding Prevention & Prohibition of Sexua Harassment at Workplace provides for protection against sexual harassment of women at workplace and for prevention and redressal of complaints. Also, in its endeavour to spread awareness on the aforementioned policy and ensure compliance by all the executives, the Bank has implemented e plan of action to disseminate the information and train the executives on the policy under the ambil of ''Gender Respect and Commitment to Equality'' (GRACE) program.

The Bank has complied with provisions relating to the constitution of Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH)

Number of cases filed and their disposal under Section 22 of the POSH is as follows:


No. of Complaints

Number of complaints carried forward from last year


Number of complaints filed during the financial year


Number of complaints disposed of during the financial year


Number of complaints pending as on the end of the financial year


(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the loss of the Bank for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors, had laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


Your Directors take this opportunity to express their deep and sincere gratitude to the customers of the Bank for their confidence and patronage, as well as to the Reserve Bank of India, Securities and Exchange Board of India, Government of India, and other Regulatory Authorities for their cooperation, support and guidance. Your Directors would like to express a deep sense of appreciation for the commitment shown by the employees in supporting the Bank. The Directors would also like to thank all our valued partners, vendors and stakeholders who have played a significant role in continuing to support the Bank.

For and on behalf of the Board of Directors YES BANK LIMITED

Prashant Kumar Sunil Mehta

Managing Director & CEO Chairman

(DIN No: 07562475) (DIN No: 00065343)

Place: Mumbai Date: June 10, 2021

Director’s Report