FM must explain jump in Yes Bank’s loan book, says Chidambaram
Former Union minister and senior Congress leader P Chidambaram on Friday criticised the central government over the ongoing Yes Bank crisis and claimed the loan book of the troubled lender has witnessed a “miraculous jump” during the last five years.
Former Union minister and senior Congress leader P Chidambaram on Friday (March 6) criticised the central government over the ongoing Yes Bank crisis and claimed the loan book of the troubled lender has witnessed a “miraculous jump” during the last five years.
The former minister said the government’s “ability to govern and regulate financial institutions stands exposed”. He also asked Finance Minister Nirmala Sitharaman to explain the jump in Yes Bank’s loan book from “₹55,000 crore in FY 2014 to ₹2,41,000 core in FY 2019”.
Chidambaram’s comments came a day after Yes Bank was placed under a moratorium, with the Reserve Bank of India (RBI) capping deposit withdrawals at the bank at ₹50,000 per account for a month and superseding its board.
Related news: Yes Bank depositors money safe; RBI working on early resolution: FM
Due to the restrictions, the bank will not be able to grant or renew any loan or advance, make any investment, incur any liability or agree to disburse any payment during the period. For the next month, the bank will be led by RBI-appointed administrator Prashant Kumar, a former chief financial officer of the State Bank of India (SBI).
When overall bank credit during the above period grew by about 10 per cent, how did YES BANK’s loan book grow by about 35 per cent?
— P. Chidambaram (@PChidambaram_IN) March 6, 2020
Chidambaram wondered if the BJP-led government would confirm that the loan book of YES Bank had grown under its watch from ₹55,000 crore in FY 2014 to ₹2,41,000 core in FY 2019. “When overall bank credit during the above period grew by about 10 per cent, how did YES BANK’s loan book grow by about 35 per cent?” he asked.
BJP has been in power for six years. Their ability to govern and regulate financial institutions stands exposed
First, it was PMC Bank. Now it is YES Bank. Is the government concerned at all? Can it shirk its responsibility?
Is there a third bank in the line?
— P. Chidambaram (@PChidambaram_IN) March 6, 2020
Criticising the government, the Congress leader said, “BJP has been in power for six years. Their ability to govern and regulate financial institutions stands exposed. First, it was PMC Bank. Now it is YES Bank. Is the government concerned at all? Can it shirk its responsibility? Is there a third bank in the line?”
He further called the government ignorant and asked Finance Minister Nirmala Sitharaman to explain the loan book jump during the five years.
Who knows, FM may blame the UPA for the miraculous jump between 2014 and 2019 !!!
— P. Chidambaram (@PChidambaram_IN) March 6, 2020
“I understand FM has made a statement blaming the UPA. That’s normal for a government living in ignorance. Does the FM know the numbers that I have tweeted? If she does, will she please explain how the loan book jumped in five years from Rs 55,633 crore to Rs 2,41,499 crore?” the Congress leader asked referring to Sitharaman.
“Who knows, FM may blame the UPA for the miraculous jump between 2014 and 2019!!!” the former minister said.
SBI should take over the loan book of YES Bank for one rupee, recover the loans, and simultaneously assure the depositors that their money will be safe and will be returned.
— P. Chidambaram (@PChidambaram_IN) March 6, 2020
Chidambaram also asked why the SBI should invest in the cash-strapped lender. “Is it correct that SBI is “exploring investment opportunity” in YES Bank? Why should SBI invest in YES Bank?” he said in a tweet.
“SBI should take over the loan book of YES Bank for one rupee, recover the loans, and simultaneously assure the depositors that their money will be safe and will be returned,” the Congress leader said.
Related news: RBI restricts withdrawals from cash-strapped Yes Bank at ₹50,000
The board of country’s largest lender, State Bank of India, on Thursday (March 5) gave “in-principle” approval to invest in the capital-starved Yes Bank.
Yes Bank has been struggling to execute a capital raising plan for the last six months. Its core equity tier-I ratio had slipped to 8.7 per cent as of September. The bank had also delayed its December quarter results.
(With inputs from agencies)
