Yes Banking crisis: ED questions founder Rana Kapoor; customers fight for cash
Clients faced difficulties because most of the cash vending machines remained dry and withdrawals at bank branches were made possible through the old and much slower system of tokens, which resulted in long lines. However, customers in some branches were able to withdraw the stipulated amount of Rs 50,000 through checks.
Depositors also face problems because Internet banking services do not work. Some even complained that they could not make payments through their credit cards.
Yes, Bank said it is still available to handle all inquiries and clarifications. Depositors are requested to contact the nearest branch for any assistance.
“We would like to inform you that our ATMs are now functional. You can locate the ATM closest to you here: https://community.yesbank.in”, read the Yes Bank tweet, tag the Twitter IDs of the Ministry of Finance and The Reserve Bank.
Meanwhile, ED continued to question Yes Bank’s founder, Rana Kapoor, regarding a money laundering investigation against him and others, authorities said. The central agency had registered Rana’s residence at the exclusive ‘Samudra Mahal’ complex in the Worli area on Friday night and had also interrogated him there.
The case against Kapoor is related to the DHFL affected by the scam, since the loans provided by the bank to the company allegedly converted non-productive assets (NPA), they said.
The ED is taking action against Kapoor under the Money Laundering Prevention Act (PMLA).
The central agency is also investigating Kapoor’s role in relation to the disbursement of loans to some corporate entities and the alleged subsequent bribes received in his wife’s accounts.
Other alleged irregularities are also under the agency’s scanner, including the one related to the alleged PF fraud at the Uttar Pradesh electric corporation, they added.
An ED source said the central investigation agency has expanded its investigation into the Yes Bank scam and is also conducting searches at the three daughters’ residential facilities: Rakhee Kapoor Tandon, Roshni Kapoor and Radha Kapoor in Mumbai and New Delhi , since they were alleged beneficiaries of the scam.
On Friday, the RBI announced a proposed reconstruction scheme for Yes Bank, hungry for cash.
In its draft ‘Yes Bank Ltd Reconstruction Scheme, 2020’, RBI said that the strategic investment bank will have to acquire a 49 percent stake and cannot reduce the holding to less than 26 percent before three years from the date of the infusion of capital.
The SBI board has already given its approval “in principle” to explore investment opportunities in Yes Bank. The head of the SBI, Rajnish Kumar, said he is evaluating the proposed reconstruction scheme for Yes Bank and has set a maximum investment limit of Rs 10,000 for the lender. He added that if SBI becomes the only investor in the bank and obtains a 49 percent stake, then the immediate investment requirement would be Rs 2,450 million.
“We have received a proposed reconstruction scheme for Yes Bank. Our legal and investment team is doing due diligence,” Kumar said.
Bank officials are doing due diligence on the draft scheme, he added.
Yes, the Bank has been struggling to raise capital. He tried to raise $ 2 billion initially during this fiscal year, which was later reduced to $ 1.2 billion since he could not attract any investors.
The bank’s board of directors is headed by former deputy managing director and CFO of SBI Prashant Kumar.
The current crisis has also triggered a war of words between the government led by BJP and the opposition parties.
A day after Congress leader Rahul Gandhi attacked Prime Minister Narendra Modi for the Yes Bank crisis and said his ideals have destroyed India’s economy, former finance minister P Chidamabaram also criticized the government.
Chidambaram said the Yes Bank fiasco was caused by the “mismanagement” of the financial institutions under the BJP government and demanded that the RBI conduct a thorough investigation and settle responsibility in the matter. He added that it was “strange” for SBI to invest Rs 2,450 million to obtain a 49 percent stake in the bank in crisis under a government-approved bailout plan.
At a press conference on Friday, finance minister Nirmala Sitharaman blamed loans granted under the UPA regime to companies stressed by financial problems at Yes Bank. She stated that Anil Ambani Group, Essel, IL&FS, DHFL and Vodafone were among the stressed companies in which the private lender had exposure before 2014.
Taking pictures in the UPA government, Sitharaman cited that the United Western Bank collapsed in 2006 under “self-appointed competent doctors.”
In a statement, the CPI-M said the “collapse” of Yes Bank has raised many troubling questions about the operation of private banks and the inability of the Reserve Bank of India to intervene on time and the episode was “the worst example of buddy capitalism. ” “.
On the other hand, minority affairs minister Mukhtar Abbas Naqvi criticized congressional leader Rahul Gandhi for his statement about the banking crisis of Yes and said he should be concerned about the growth of his party.
“The country’s economy is in strong and safe hands. Even when the world economy collapses, we have maintained growth.”