Yes Bank has collapsed and as immediate consequences, a flurry of activities had been noticed over the last few days. If the political slugfest over the regime of origin of the crisis has raised eyebrows and central government’s intervention is making news, that which is most discernible is the deep distress of the common depositors who, over the days since Yes Bank went bankrupt, had to face not only a physically strenuous episode of queuing for long hours in front of the bank’s branches and ATMs in hope of withdrawals, but had been facing an equal kind of mental agony over an unavoidable question- are the deposits safe at all.
The Indian banking sector, no doubt has underwent several changes over the last decade and a half and advent of private banks have given the customers a new choice of smoother and professional services and hence there has been enormous increase in their customer base, with noticeable takers being the new generation. But Yes Bank’s case will surely give rise to several questions, the primary one being why a new generation bank founded and run by professionals had to sink? At present, a ‘post mortem’ is on and newer findings are coming to light each day. And the principal cause for the downfall that has so far emerged is the enormous accumulation of unpaid loans which the bank doled out to some business entities which ultimately took nature of Non-Performing Assets or NPAs, a term which is now quite commonly known and often heard. It has also been reported in media that in anticipation of ‘something wrong’ many depositors had withdrawn money to the tune of Rs 18,000 crore from the bank during April to September 2019 leading to a liquidity crunch and as it is known, it is the depositors’ money that keeps a bank going, as soon as this trend started, the domino effect was evident that finally led to the current mess. It is also a fact that these depositors who gauged the crisis beforehand and managed to take out their money were mostly business people who normally have a fair understanding of the ‘tricks of trade’. But for most ordinary customers, it’s not at all possible what’s happening inside and just like the case of the infamous PMC Bank crisis, nearly the same has happened here too. Thankfully, government has intervened and there are confirmations that SBI will buy stake and RBI to act an overseer of the bank’s matters in the immediate run.
Both the PMC Bank and Yes Bank failures will also offer many lessons for the Indian banking sector to learn, touching multiple aspects. It will be better for the banking industry as a whole if they are sincerely learnt.  

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Kenter Joya Riba

(Managing Editor)
      She is a graduate in Science with post graduation in Sociology from University of Pune. She has been in the media industry for nearly a decade. Before turning to print business, she has been associated with radio and television.
Email: kenterjoyaz@easternsentinel.in / editoreasternsentinel@gmail.com
Phone: 0360-2212313

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