A tale of deceit and greed

This book, which reads like a breezy suspense thriller, gives us an insider's look at the spectacular rise and fall of maverick banker Rana Kapoor.

With a catchy title, ‘The Banker Who Crushed His Diamonds: The Yes Bank Story’ by Furquan Moharkan (Disclosure: The author works with this newspaper) is sure to attract the attention of everyone, even book haters. The book traces the phenomenal rise and the ignominious fall of the maverick banker Rana Kapoor. The systemic failure of Yes Bank had caught the imagination of investors and depositors in early 2020 at a time when there were a series of failures and financial institutions had been going belly up. The failure of DHFL, IL&FS and PMC Bank was fresh in the mind of the public who have been losing faith in the financial system. The mess at the 75-year-old Lakshmi Vilas Bank and its subsequent merger with DBS Bank India, a subsidiary of DBS of Singapore, has only confirmed this belief.

Based on his contacts in the industry and on his own credentials, the author brings together a fascinating tale of manipulation, greed and deceit and supports them with facts. The book reads like a suspense thriller and gives us an insider’s look at the main protagonist Rana Kapoor who comes across as “shrewd, manipulative, arrogant and intimidating”. The author, having had plenty of experience in stock market reporting, has made a sincere effort to bring awareness among retail investors who get shortchanged in any such debacle. In a subtle way, he conveys a message that retail investors should not get carried away by the noise created by unscrupulous promoters and brokerages, but instead, should do their homework while investing in stocks. In fact, there are messages for other stakeholders too. For bankers, there is a message as to what happens when compliances and risk control measures are adhered to. And for the RBI too — why it should step in early instead of waiting till the last minute to admonish and penalise banks to restore the stakeholder’s faith in the system.

Carefully-built image

To be fair, the book does cover most of the aspects that it intended to and highlights the steps taken by RBI post the collapse of Yes Bank on governance issues. The author has successfully exposed the inherent weaknesses of the Indian financial system and its regulators. In simple language and easy pace, he chronicles the life of Rana Kapoor from his early career at the Bank of America and argues that the borderline fraud symptoms and lobbying were present in Rana Kapoor even then — traits that helped him rise. He narrates lucidly how the banker was able to build his image carefully through his contacts with people in power and bureaucracy. The book highlights the fact that Kapoor was a smooth talker, and his flamboyance was perhaps influenced by Rana Talwar of the Bank of America; again qualities that made him the darling of business journalists.

The reasons for failure

The author structures his arguments well while analysing the causes of the Bank’s failure on governance issues, wrong asset classification, divergence in reporting, centralisation of power by Rana Kapoor and lending to corporates without proper documentation and risk assessment. The role and involvement of Rana Kapoor in DHFL and HDIL, misuse of position and kickbacks received are also well explained. The mention about the quote of a bank’s executive sums up the failure of the Bank: ‘There are two types of business models for banks in India — one is the HDFC Bank model, the other is the YES Bank model. In case of the HDFC Bank, the risk team sets the metrics and the sales team gets the borrowers accordingly. In case of the YES Bank, the sales team gets the exposure and then the risk team adjusts the metrics accordingly.’

Interesting trivia

While most of the information covered in the book on the final days of Yes Bank leading to the suspension of the board is in public domain, there are interesting trivia about Rana Kapoor like how he was so obsessed with the number nine in everything, whether it be the location of his office or the numbers on his cars.

Another interesting trivia is on why Rana Kapoor bought M F Husain’s portrait of Rajiv Gandhi for Rs 2 crore from Priyanka Gandhi. Another tidbit is on how Rana Kapoor was nowhere in the picture originally when Harkirat wanted to set up Yes Bank with Rabo Bank in India.

In short, this debut work is an excellent read and I would recommend it for everyone. While reporters get an exposé on the dangers of investigative journalism as there are references to how the author got legal notices, trolls on twitter, personal slander and intimidation when he was collecting information on the collapse of Yes Bank. The areas where the book tends to drag are information on the timeline of Yes Bank in the chapter “The birth of Yes Bank” and the chapter “Soap Opera’, where the extract of the clauses of four articles by Ashok Kapur and Rana Kapoor are given verbatim.