BANGALORE -- The latest Reserve Bank of India takeover of a commercial lender shows a banking system teetering under massive bad loans, a financial system rife with corruption and an economy in thrall to crony capitalists, economists say.
The Indian central bank last week rescued Mumbai-headquartered Yes Bank, citing the lender's inability to raise capital and cope with potential nonperforming loans. The RBI also froze most of the bank's transactions, limiting depositor withdrawals to 50,000 rupees ($673) and barring it from extending new loans, making investments or making payments.
