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. It’s reasonable to expect that even Yes Bank will become the target of some sort of special situation investor. Meanwhile, Yes Bank has a $470 million exposure to Zee’s controlling shareholder, Business Standard reported in January.

Source: Washington Post May 16, 2019 00:00 UTC