The Yes Bank story...
First reaction why Govt bank should spend money to save Private Bank.
Why after allowing IL&FS go bust, allowing DHFL to struggle, allowing PMC bank to sink, allowing other NBFCs struggle under their own misjudgments, Govt is acting now.
Why in the past UTI bank was saved, which was converted to AXIS bank later & UTI mutual fund was saved by unique solutions.
Yes bank kind of default can bring ripple effect in entire banking, mutual fund, financial sector. Appreciate high morale ground taken by Govt earlier of not saving organisations which were in trouble because of their own sins partially & partially by burocratic hurdles in resolving genuine issues.
All decisions were for long term benefits of nation, like GST, bankruptcy code, etc. Process driven recovery or Jugad based recovery. Till now everything was process driven. Nirav Modi’s empire could have been taken over temporarily by independent board, at least jobs could have saved, small vendors could have been saved, ripple effects-distrusts in that industry could have been avoided.
They need to be flexible at this moment & accept that there are challenges & they have to save bad boys also for larger benefits of good boys.
Good to see flexibility shown by Govt & RBI Governor..