Yes Bank - RBI’s folly


Well-Known Member
RBI kicked out Rana Kapoor from Yes Bank, and created some unintended consequences.

The new management has much more incentive to safeguard its own interest, than to safeguard the interest of the bank.

Ravneet Gill will be a fool if he takes up some proposal that will benefit Yes Bank, but might not be the best thing for him. For instance, a takeover of Yes by some other bank, means that Ravneet Gill is unlikely to continue as CEO. Why would he play that game?

RBI has been stupidly trying to reduce the stake held promoters in banks - and only they know the logic why they are doing so. Having more skin in the game has to be good - because it allows greater responsibility. Before losses wipe out any depositor funds, it has to first wipe out the capital.

RBI needs to step in and force a take over of Yes Bank - probably by a foreign bank that wants to kick start operations in India. Ravneet Gill is clearly not the man for the job.

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