Still, with the old management out and a clean-up guy in place, why would the RBI get involved with Yes Bank now? A reasonable guess is Yes Bank’s linkages with financial and real-estate firms, two of the businesses facing the biggest funding squeezes in India. A fire sale of debt securities held by Yes Bank’s treasury would further push up funding costs for its borrowers—the struggling shadow-lending industry. The RBI has previously used its special powers to appoint directors in Dhanlaxmi Bank as well as Lakshmi Vilas Bank. Meanwhile, Yes Bank has a $470 million exposure to Zee’s controlling shareholder, Business Standard reported in January.

Source: Mint May 16, 2019 17:03 UTC