The Yes Bank collapse was a train wreck expected to happen. Finance industry professionals had been predicting it for months. When Yes Bank delayed publication of its third quarter results for financial year 2019-20 (Q3FY20), the writing was on the wall.

There were big withdrawals by savvy depositors just before the Reserve Bank of India (RBI) imposed its 30-day moratorium on March 3. However, the RBI action caught some institutions by surprise. The bailout by State Bank of India (SBI) is accompanied by a categorical guarantee of deposits. But it may leave big bondholders in the lurch. ...