‘Loans on phone to chacha-bhatija’ behind Yes Bank fall: FM Sitharaman blames UPA govt for the mess

By: |
Updated: Mar 06, 2020 9:43 PM

With the RBI taking charge of Rana Kapoor co-founded Yes Bank, Finance Minister Nirmala Sitharaman has put the blame squarely on the Congress-led UPA government for the bank’s current crisis.

Nirmala SitharamanFinance Minister Nirmala Sitharaman

With the RBI taking charge of Rana Kapoor co-founded Yes Bank, Finance Minister Nirmala Sitharaman has put the blame squarely on the Congress-led UPA government for the bank’s current crisis. Till 2014, the UPA government used to give loans over the phone to chacha-bhatija, and it is because of this that the corrective action is required for India’s banks, Finance Minister Nirmala Sitharaman told reporters in Hindi on Friday. Since the government is putting efforts for correction, improvement is also taking place in the country’s banks, she added. Several corporate borrowers of Yes Bank later turned into corporate defaulters. This includes marquee names such as Anil Ambani group, Cafe Coffee Day, Jet Airways and IL&FS, among others.

The RBI has also put the bank under moratorium period for 30 days and FM Sitharaman said that the actions are being taken in line with the best interests for all. The central bank has capped the maximum withdrawal limit on India’s fourth biggest lender Yes Bank to Rs 50,000 and Finance Minister Nirmala Sitharaman tried to assuage the worried depositors. Acknowledging that the depositors might be afraid and confused about their deposits, she assured that they will not lose any money. “I am constantly in touch with the Reserve Bank and the steps that are taken in the interest of the depositors, the bank and the economy… the depositors can be assured that their money is safe,” she said.

In the meanwhile, Krishnamurthy Subramanian, Chief Economic Advisor also said that the government is looking at all the options for restructuring Yes Bank. Eminent bankers including Deepak Parekh, Aditya Puri, and Uday Kotak also said that the depositors must not worry about the troubled private sector Yes Bank and the moratorium is expected to get over before the full 30-day period. “I expect action in the next few days. Pretty confident this action under section 45 of the Banking Regulation Act will protect the customers of Yes Bank,” Uday Kotak, Executive Vice-Chairman and Managing Director of Kotak Mahindra Bank, said, CNBC TV-18 reported. 

Yes Bank share closed at Rs 16.60, down 55% from the previous day’s close.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1South Indian Bank cuts MCLR by 0.05% across tenors
2PMC Bank PMLA case: ED attaches 3 hotels in Delhi worth Rs 100 crore
3NBFC delinquencies may rise up to 250 bps in FY21: Crisil