Letter to BS: Intriguing how despite checks YES Bank could lend recklessly

The piece by Tamal Ban­dyo­pa­dhyay, “Yes Bank rescue: In­dia’s TARP moment?” (March 9) might bring peace to many stakeholders but not the AT-I bondholders. But the intriguing part is this: The board and top management of the bank were allowed to lend recklessly, demeaning asset quality and putting the bank to a great risk, despite a host of regulatory no­rms and internal loan policies. The epicentre of revival will be the effectiveness of the action plan of the new management to recover loans, a difficult task given the debt resolution ecosystem and likely litigations.
 
The rescue package should be able to reduce the pace of deposit outflow, once the window is opened and the bank is put on normal mode, it will ta­ke considerable time for new deposits to accrue.
 
K Srinivasa, Rao

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