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Andy Mukherjee

Yes Bank's Bonfire of Insanity Was Left to Burn

It was obvious two months ago that India’s biggest lender would need to be the rescuer. Why the wait?

No Godot arrived to rescue Yes Bank.

No Godot arrived to rescue Yes Bank.

Photographer: Dhiraj Singh/Bloomberg

Yes Bank Ltd. has become no bank.

Late Thursday evening in Mumbai, India placed the troubled private-sector lender under moratorium. Depositors will only be allowed to withdraw the rupee equivalent of less than $700 for the next month and the bank won’t be allowed to make new loans. In the meantime, the central bank will seek a way to revamp or merge a bank whose previous owner-manager has left it with few good assets and a truck load of liabilities. In September, the bank had total deposits of 2.1 trillion rupees ($28 billion). Yes delayed its December-quarter results, but assuming that 20% of deposits have since scampered off to safer lenders, authorities still have a $20 billion-plus hole to fill.