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Suspecting “sabotage” of the rescue plan, the government played the game of cat and mouse to corner Rana Kapoor

NEW DELHI: At least three times in the last eight months or so, potential investors in Yes Bank withdrew just when an agreement seemed to be coming to fruition. For a while, the Reserve Bank of India and the government, which guarded the bank, were baffled as to why this happened.

The bewilderment gave way to the suspicion that the ousted promoter Rana Kapoor intervened to sabotage a change plan after the 62-year-old man, now in ED’s custody, began sending polls to the government and the RBI indicating his enthusiasm for return to the bank, according to sources highly located near the developments. In one case, the RBI had even told an investor that they could deposit money into a escrow account. “Every time things seemed to move towards the end, their people would meet potential investors and probably deter them,” an important government source told TOI.

Finally, in an attempt to attract Kapoor back from London, where he had been camping for several months, it is said that the RBI conveyed the impression that, given the failed attempts to attract new investors, it might be open for him to return to the country . Bank that had co-founded in 2004.

But as soon as he returned, several research agencies monitored him to make sure he did not flee the country. In fact, the sources said, there were some nervous occasions when he briefly turned off the radar.

During a visit to the waterfront apartment building in Worli, one of the most expensive in Mumbai and the country, where Kapoor lived (as well as the fugitive diamantaire Nirav Modi), the guards of the building told ED officers that They had cultivated that there were signs that Kapoor planned to leave India again, which led them to intensify the vigil. He may have realized that the RBI and the government were considering a reconstruction plan that did not involve him.

With a meeting of the bank board scheduled for March 14 to consider quarterly results, there was growing concern within the financial sector that Yes Bank’s bad loans, disclosed at around Rs 16,000 million in September, were approaching to crisis proportions and could trigger a wider crisis. The big depositors with their ears on the ground had already begun to take out their money.

Within the government, it was debated whether Kapoor should be arrested, risking losing confidence in the bank, or if attention should be focused on getting new investors led by the State Bank of India. With time running out, the government decided to bite the bullet, almost simultaneously imposing a moratorium, announcing a reconstruction plan and green light actions against Kapoor. Moratoriums are generally maintained over the weekend, when markets are closed and economic activity is low, and this was the last weekend before March 14.

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