Eight banks' ₹10,000 crore rescue turned Yes Bank from a 2020 collapse to steady profit

Yes Bank entered March 2020 in freefall: a December-quarter loss of ₹18,564 crore, gross bad loans of ₹40,709 crore, and deposits down by roughly ₹72,000 crore between October 2019 and March 2020. The Reserve Bank of India placed the private lender under a moratorium while a rescue was assembled.

Under the RBI's reconstruction scheme, eight banks injected ₹10,000 crore for 1,000 crore shares at ₹10 each: State Bank of India put in ₹6,050 crore for a 49% stake and pledged not to fall below 26% for three years, ICICI Bank and HDFC committed ₹1,000 crore each, Axis ₹600 crore, Kotak ₹500 crore, Federal and Bandhan ₹300 crore each, and IDFC First ₹250 crore. When the scheme took effect, the stock surged as much as 58% in a day.

The clean-up worked. Yes Bank lost ₹3,462 crore in FY21, then posted profits every year: ₹1,066 crore in FY22, ₹1,251 crore in FY24 and ₹2,406 crore in FY25. Gross NPAs fell from 13.9% in FY22 to 1.7% by March 2024 and 1.6% a year later, deposits grew about 22% year on year, and in April 2024 SBI received approval to divest its 25.02% stake once the three-year lock-in ended, with reports pointing to more than a twofold return on its ₹10-a-share investment.

Yes Bank swung from a ₹3,462 crore FY21 loss to ₹2,406 crore FY25 profit; gross NPAs fell from 13.9% to 1.6% and SBI won approval to exit its 25% stake.

Eight banks injected ₹10,000 crore at ₹10 a share, pricing the rescue low enough to earn rescuers a return, not just save a competitor.

SBI's commitment to hold at least 26% for three years gave the bank a stable anchor while it cleaned up bad loans.

A public reconstruction scheme froze the deposit run, letting management rebuild deposits and cut gross NPAs from 13.9% to 1.6%.

The bank then compounded: deposits grew roughly 22% year on year while profit went from a ₹3,462 crore loss to ₹2,406 crore.

Rivals can rescue a failed bank at a profit: coordinated equity at a low entry price, a floor stake, and a clean-up mandate turned a bailout into a recovery.

Yes Bank has posted a profit every year since FY22, with FY25 net profit of ₹2,406 crore and gross NPAs at 1.6%. SBI's lock-in ended in March 2024 and it received government approval to divest its 25.02% stake in April 2024; reports valued the potential exit at more than double its ₹10-a-share cost. The lender has continued to target deposit growth above loan growth, framing the recovery as a long, stable rebuild rather than a quick fix.