This particular story is not to draw any parallel in India. The purpose is to make the point that things do go wrong as ‘bailouts’ are always risky, tricky and, at times, can threaten the very existence of the acquiring institution. Yes Bank’s bailout by India’s largest bank, State Bank of India (SBI), is one of the biggest in Indian financial system’s history. The Indian market hadn’t seen bailouts worth hundreds and thousands of crores. But that is changing. Take the ₹13,000 crore fraud at the public sector bank, Punjab National Bank, which created a big hole in its balance sheet, which the government then tried to fill by injecting fresh capital. Similarly, the weak IDBI Bank was handed over to LIC, which had to pump in over ₹35,000 crore fresh capital to put the bank back on track.
This story is from the April 05, 2020 edition of Business Today.
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This story is from the April 05, 2020 edition of Business Today.
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