P Chidambaram says RBI’s draft for Yes Bank is bizarre; asks how nobody noticed big jump in loan book

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Updated: Mar 07, 2020 4:50 PM

Former finance minister P Chidambaram has raised questions on RBI and the government asking how did the loan book of Yes Bank swell up, doubling the outstanding loans in only 24 months. “When every commercial bank submits its balance sheet to the RBI at regular intervals, how no one in the RBI and government or […]

yes bank, ebi draft, chidambaram on yes bank, sbi, rbi draftP Chidambaram raised doubt on SBI’s willingness to volunteer for this rescue, adding that LIC was also not a volunteer in the IDBI Bank

Former finance minister P Chidambaram has raised questions on RBI and the government asking how did the loan book of Yes Bank swell up, doubling the outstanding loans in only 24 months. “When every commercial bank submits its balance sheet to the RBI at regular intervals, how no one in the RBI and government or any other auditor did not notice a jump in the loan book ?” P Chidambaram said. While the loan book of the entire banking system was increasing at around 9-10 per cent, the loan book of Yes Bank was growing at 35 per cent per year. Criticising the RBI’s draft of the resolution plan for Yes Bank, P Chidambaram said that the plan is bizarre and he doesn’t understand why somebody would buy worthless shares at Rs 10.

The former finance minister also said that once the moratorium period is lifted, a sizeable part of loans will become stressed. He has raised doubt on SBI’s willingness to volunteer for this rescue, adding that LIC was also not a volunteer in the IDBI Bank case and these things are just imposed. 

Also Read: SBI Chairman says completely ready to fill hole in Yes Bank’s balance sheet; assures quick action

Targeting the central government, P Chidambaram said that he does not predict any financial emergency but if the mismanagement will continue, trouble will keep on taking different shapes. He further said when the merger was done during his term, he made sure that every depositor gets his last pie. Thus, he has urged RBI to find the cause of incompetence and negligence and make sure that the depositors’ money is safe. Meanwhile, SBI Chairman Rajnish Kumar today said that the State Bank of India will work overtime and 24×7 to get the resolution plan approved and implemented much before the moratorium period of Yes Bank gets over.

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