Yes Bank lacked a culture of cost control, and under the new management, the lender is targeting to reduce operational expenses by 20 per cent in FY21 by rationalizing branches and ATMs, giving up unwanted leased spaces and renegotiating rents, a top official has said.
The city-based lender is experiencing delays in loan recovery efforts as big defaulters are approaching courts, its new chief executive and managing director Prashant Kumar told PTI.
Kumar was asked to lead Yes Bank in March after its rescue by a SBI-led consortium of lenders after alleged governance lapses under co-founder and chief executive Rana Kapoor.The bank reported a 21 per cent reduction in operating expenses in September quarter."Unfortunately, there was no control on costs," Kumar said, adding that a global consultant has charted out a step-by-step agenda to reduce spending through which it aims to save 20 per cent on operating expenses in FY21 over FY20.
The bank has already surrendered two floors in Central Mumbai's upscale Indiabulls Finance Centre, which houses its corporate offices, Kumar said.
Besides, it is aiming to renegotiate rent contracts for all 1,100 branches. Kumar said the bank is targeting reduction in rents, a major operational overhead for lenders, by 20 per cent through the exercise. It will be shutting down 50 branches as part of a rationalization effort, which will reduce its overall network in FY21 as there will be no new openings, Kumar said.