March 08, 2020

Yes-no-maybe policies and collapse of Yes Bank

In the context of the moratorium imposed on Yes bank, Shankkar Aiyar writes on the series of financial institutional collapses and the poor regulatory capacity underlying these. Excerpts:


"In 2018, the first glimpse of the Yes Bank magic and the signs of fragility came to the fore when it was discovered its lending growth was nearly twice its deposit growth. At risk: depositors’ monies, and that of Lord Jagannath at Puri, adding up to over Rs 2.1 lakh crore."


On poor governance:


"There is at the corporate level poor governance — the boards of the institutions were steeped in sloth, the auditors flailed and failed in diligence, the actions of rating agencies have been post mortem. There is also the spectre of regulatory pusillanimity."


Read the full article here.



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