It is heartening to learn that the consumer services of Yes Bank may be restored as early as this weekend. The RBI-appointed administrator Prashant Kumar has given an assurance that the bank is liquid enough for normal fund transactions. ATM operations too have been restored. Earlier, RBI had acted to supersede the Board for a month to save the bank from collapse.

Over the years, on account of an overextended and aggressive lending policy under its MD and CEO  Rana Kapoor, Yes Bank had faced deterioration in asset quality and it had inadequate capital to service its commitments. RBI is now putting together a SBI-led rescue operation to refinance the bank to save the fourth largest private lender. RBI’s actions are being debated, but better late than never. A collapse would have tripped the already strained financial system into a spiralling crisis.

We are simultaneously seeing a criminal investigation into the role of founder chief Rana Kapoor, who has been charged and arrested for receiving `600 crore in kickbacks in return for helping sanction loans of `4,500 crore to Dewan Housing Finance Corporation Ltd. Kapoor’s daughters, as directors of his various private companies, are also in the dock. In these shenanigans, timing Rana Kapoor’s arrest with the takeover of Yes Bank seems odd. Kapoor’s time as chief of Yes Bank ran out quite some time ago. Prodded by RBI, Kapoor stepped down as chairman in January 2019 and by October 2019, had sold his entire stock in the bank.

The new MD and CEO Ranveet Gill has been in charge for a year now. The contours of the DHFL scam and those associated with it have been known to the agencies for quite some time. Why was action against Kapoor delayed for so long? When consumers and the financial community are seeking answers on what went wrong with Yes Bank, they are being treated to a sensational diversion of an arrest of a banker. If the allegations are true, someone should answer for the 18-month delay. Unfortunately, these tactics only go to cloud the issues on hand.