|  |  | 

India Top Headlines

OSI Rescue Plan for the ‘Strange’ Yes ​​Bank, says P Chidambaram

img-responsive

NEW DELHI: Congress leader and former Union finance minister P Chidambaram said on Saturday that the Yes Bank fiasco was caused by the “bad administration” of financial institutions under the BJP government and demanded that the RBI conduct a thorough investigation and fix the responsibility in the matter.

He said it was “strange” that the State Bank of India (SBI) invested Rs 2,450 million to obtain a 49 percent stake in the bank in crisis under the government-approved bailout plan.

“This is an issue that must be thoroughly investigated and the responsibility fixed,” he told reporters.

He asked how no RBI official noticed a 35 percent jump in the bank’s loan portfolio in a year, when other banks’ loan portfolios were growing to nine percent.

Yes Bank, which lends itself to loans “is not a bank but a buccaneer,” he said, adding that Yes Bank’s loan book from March 2014 to March 2019 was allowed to grow and jump.

“How did the Yes Bank loan book jump from Rs 55,633 million in March 2014 to Rs 2,41,499 million in March 2019, when I was not the finance minister,” he asked.

“… notice the increase in 2016-17 and 2017-18, the two years immediately following the demonetization. No one in the RBI or the government is responsible,” he asked.

The congressional leader said that whoever takes over the bank must make sure that the depositors’ money is safe and that each depositor has their money insured, since the depositors are the most innocent.

The former finance minister asked the government a series of questions about the Yes Bank crisis.

“What committee or who authorized the granting of new loans after March 2014? The RBI and the government did not know that Yes Bank was in a wave of loans? It was not a bank but a buccaneer. No one in the RBI and the government Did you read the bank’s balance at the end of each year? he asked.

Chidambaram also asked why nothing changed after the CEO of Yes Bank was replaced and a new one was appointed in January 2019, and why nothing changed after a former RBI Deputy Governor was appointed to the Yes Bank Board. in May 2019.

“Why didn’t the alarms sound when Yes Bank reported its first quarterly loss in the January-March 2019 quarter,” he asked.

Chidambaram said the government and the finance minister would like the story to disappear from the media, but despite their best efforts, the mismanagement of financial institutions by the BJP government will be an issue that will remain in the public domain and It will be discussed extensively.

“The best judge of the management of the economy is the market, not the finance minister or any exfm or any newspaper. Even considering the effect of the coronavirus threat, it is notable that yesterday sensex fell by 884 points,” he said Chidambaram said.

He noted that the price of an SBI share fell by Rs 18 and the rupee to the dollar decreased by 54 paisa (-0.74 percent).

“The price of a Yes Bank share fell from Rs 36.80 to Rs 16.15,” he said, adding that “it’s really worth nothing.”

“I said yesterday that a better option would be for SBI to assume, under RBI orders, the Yes Bank loan book in a rupee and the obligation to assure all depositors that their money is safe and will be returned. Simultaneously, SBI must do as much as possible to recover as much of the outstanding loans as possible. There are other options that can be explored in consultation with former governors C Rangarajan and YV Reddy, “said the former finance minister.

One day after imposing a 30-day moratorium on Yes Bank and limiting the withdrawal limit at Rs 50,000, the RBI issued a draft reconstruction scheme for the private sector lender on Friday night.

Times of India

osi-rescue-plan-for-the-strange-yes-%e2%80%8b%e2%80%8bbank-says-p-chidambaram

ABOUT THE AUTHOR