“The three episodes of rescue banks” Yes Bank and LVB rescued, but investors pay the price!

 “The three episodes of lost banks” Yes Bank and LVB rescued, but investors pay the price!

PMC, Yes Bank, and LVB—all three episodes have important lessons for investors and depositors

There are certain similarities between the Yes Bank rescue and Lakshmi Vilas Bank (LVB) bailout. If additional tier-1 bondholders (AT1 Bondholders) were the victims of the Yes Bank episode, equity shareholders have been left at the receiving end in the LVB bailout. Bank rescues have always come at a cost for investors.

In the case of Yes Bank, the equity holders were saved but the shock came for AT1 Bondholders whose Rs 8,400 crores worth papers were written off as part of the SBI-led reconstruction scheme in March this year. Since then those investors, including retail and institutional investors are fighting in courtrooms to fight their case.