To do things differently, the political hold over bank loans needs to disappear
The rumblings of discomfort had been building up for far longer than we think. When the government and the Reserve Bank of India (RBI) finally pulled the plug on Yes Bank last week, it was to stop the deposit haemorrhage that had been building up over the past few months. That the bank played on the edge of regulation plenty of people in the system knew. That RBI was “uncomfortable" with the bank has also been clear for years. A mix of flamboyance, networking with politicians and bureaucrats across the years was used by the bank, which was also known known to “massage" asset quality at points in time when the disclosures on asset quality were due.