India's Yes Bank Breakdown Disrupts Walmart's PhonePe Among Dozen Other Services

Tens of millions of merchants and users in India are struggling to make online transactions and use several popular services after the nation's central bank seized control of Yes Bank, the fourth largest lender in the country. From a report: The emergency takeover of the private sector bank has taken off several financial startups that rely on it for facilitating services such as processing QR codes, point-of-sale terminals as well as transactions of UPI-based payments. Leading payments app PhonePe, owned by e-commerce giant Walmart, has been inaccessible to tens of millions of its users since Thursday evening (local time). The startup said in a statement that it was working to restore its services, and has solved some of the issues for its merchant partners. [...]

New Delhi took over Yes Bank midnight on Thursday, after the Reserve Bank of India said it had no alternative but to implement measures to replace the private sector firm's board and temporarily restrict withdrawals and suspend all other transactions for 30 days. Yes Bank has struggled for months to raise capital to improve its financials. According to NPCI, Yes Bank is the technology banking partner for ticketing platforms Cleartrip, MakeMyTrip, and RedBus, telecom operator Airtel, food-delivery startup Swiggy, movie ticketing business BookMyShow and PVR, Microsoft's chat service Kaizala, as well as several other Flipkart properties including the marquee service, fashion platforms Jabong, and Myntra.

Naturally

[drinkypoo]

It's generally not considered a good idea to Pe on your Phone.

Especially don't Pe in your iPhone.

Re:

[cayenne8]

I think likely another problem is naming a bank "Yes"....

Re:

[Fly Swatter]

Well, it seems that didn't work out too well.

Re:

[Cro Magnon]

Yeah, that's a big no no!

Re: Naturally

[Firedog]

It did better in focus groups than the top alternative (No).

Re: Naturally

[Firedog]

Theyâ(TM)re waterproof now. But maybe not Pe proof.

Re:

[jellomizer]

To gain market access to the second most populated country in the world?

Americans have more money, But China and India have a lot more potential customers. Being that Walmart like to push low cost products, India seems like it would be a good fit.

Another one down ...

[Retired ICS]

Another one bites the dust. Keep shuttering those damn scammers.

All that is missing is the good news that while attempting to make the arrest, unfortunately the senior scammers^W executives, were shot and killed while attempting to flee custody.

If you depend on it, consider funding it!

[Aristos Mazer]

If big companies needed the services, when the bank asked for capital months ago, why did not the companies pony up some capital? Someone failed risk analysis.

Re:

[Fly Swatter]

Doesn't matter how much risk analysis training your have if the shareholders say NO. Plus why would anyone try to save a bank when the government can clearly do it for you at their taxpayer expense.

Re:

[Aristos Mazer]

Because that government didn't care about your service and shut it down as non-essential, leaving your business out of luck.

Re:

[Cederic]

Because the cost of losing the services is substantially lower than the loss of a bad investment in a failing bank.

Someone failed basic business.

Re: If you depend on it, consider funding it!

[Aristos Mazer]

It would not be failing if you paid enough for the services to keep it open. And if its collapse kills your whole business, it is a mandatory cost.

Re:

[Cederic]

Paying enough for the services to keep a bank open very rapidly becomes unsustainable as the value of those services is negligible relative to the funding shortfall of the bank.

Do you understand why banks fail? It's not because they charge too little.

Re:

[Aristos Mazer]

Did you read the details of this particular bank? It's not a typical bank.

Re:

[Cederic]

What the fuck's so special about it? It offers commercial and personal banking services, and managed its risk exposure poorly resulting in an unsupportably high rate of loan failure.

It's the usual tale. Bank lends money to high risk borrowers, fails to anticipate market and regulatory changes, finds itself short of operating income and needs to raise capital, fails, the state steps in to avoid a run on the bank and catastrophic damage to the country's finance industry.

Seen it dozens of times, this one's not