ARMalik
SENIOR MEMBER
- Joined
- Dec 7, 2017
- Messages
- 6,046
- Reaction score
- -7
- Country
- Location
https://www.moneycontrol.com/news/b...lic-get-ready-for-rescue-mission-5009771.html
As Yes Bank bites the dust, SBI and LIC get ready for rescue mission
The one-month moratorium complete with a withdrawal ceiling of Rs 50,000 per account can at best be described as a band-aid to stem a cerebral haemorrhage
The fall of India’s fifth-largest private bank, Yes Bank, is a text book study of how banking and financial sector loopholes are still used with impunity by promoters to give short shrift to the gullible public. It continues to be on the case study track over how the watchdog institutions and agencies are quick to bail out the real culprits, no matter what it means to the small stakeholder.
The latest in a series of bank meltdowns provides gaping holes in the way corporate governance is practised in India, where the retail investor or client gets the least priority. Culpable by their decision to remain inactive is the board of directors who never thought it necessary to blow the whistle while the big investors withdrew huge chunks of money, before the apex bank, the Reserve Bank of India (RBI), superseded the Yes Bank board and imposed a Rs 50,000 withdrawal cap from March 5 to April 3.
Surely, nobody can deny multiple-level failures by institutions such as the RBI and the Securities and Exchange Board of India (SEBI), the ordained watch dogs which keep failing again and again, no doubt due to external compulsions — some allegedly even from government authorities.
The one-month moratorium complete with a withdrawal ceiling of Rs 50,000 per account can at best be described as a band-aid to stem a cerebral haemorrhage. This is because there may be quantity here, but no real quality in terms of actual funds in terms of deposit base, which stand completely denuded. This is just as the case with bank’s shares systematically unloaded by big players and picked up by the gullible retail investors.
Consider what has actually transpired in the past few months:
The deposit base and net worth of the bank, whose deposit base stood in excess of Rs 2 lakh crore till the latter part of September 2019 has got wiped out in 4-5 months.
The combined message of the beleaguered bank’s board being superseded by the RBI and the government diktat to the State Bank of India (SBI) and the Life Insurance Corporation (LIC) to clean up the muck and carry Yes Bank’s sizeable liability mess has led to a bloodbath both in the BSE and the National Stock Exchange (NSE).
It’s not just the stocks of Yes Bank and the SBI, but all banks that are taking the beating. This at a time when global markets are going into a tailspin because of the COVID-19 outbreak.
As Yes Bank bites the dust, SBI and LIC get ready for rescue mission
The one-month moratorium complete with a withdrawal ceiling of Rs 50,000 per account can at best be described as a band-aid to stem a cerebral haemorrhage
The fall of India’s fifth-largest private bank, Yes Bank, is a text book study of how banking and financial sector loopholes are still used with impunity by promoters to give short shrift to the gullible public. It continues to be on the case study track over how the watchdog institutions and agencies are quick to bail out the real culprits, no matter what it means to the small stakeholder.
The latest in a series of bank meltdowns provides gaping holes in the way corporate governance is practised in India, where the retail investor or client gets the least priority. Culpable by their decision to remain inactive is the board of directors who never thought it necessary to blow the whistle while the big investors withdrew huge chunks of money, before the apex bank, the Reserve Bank of India (RBI), superseded the Yes Bank board and imposed a Rs 50,000 withdrawal cap from March 5 to April 3.
Surely, nobody can deny multiple-level failures by institutions such as the RBI and the Securities and Exchange Board of India (SEBI), the ordained watch dogs which keep failing again and again, no doubt due to external compulsions — some allegedly even from government authorities.
The one-month moratorium complete with a withdrawal ceiling of Rs 50,000 per account can at best be described as a band-aid to stem a cerebral haemorrhage. This is because there may be quantity here, but no real quality in terms of actual funds in terms of deposit base, which stand completely denuded. This is just as the case with bank’s shares systematically unloaded by big players and picked up by the gullible retail investors.
Consider what has actually transpired in the past few months:
The deposit base and net worth of the bank, whose deposit base stood in excess of Rs 2 lakh crore till the latter part of September 2019 has got wiped out in 4-5 months.
The combined message of the beleaguered bank’s board being superseded by the RBI and the government diktat to the State Bank of India (SBI) and the Life Insurance Corporation (LIC) to clean up the muck and carry Yes Bank’s sizeable liability mess has led to a bloodbath both in the BSE and the National Stock Exchange (NSE).
It’s not just the stocks of Yes Bank and the SBI, but all banks that are taking the beating. This at a time when global markets are going into a tailspin because of the COVID-19 outbreak.
