This Article is From Mar 06, 2020

Yes Bank Crisis Originated On Congress Watch, Says Nirmala Sitharaman

Nirmala Sitharaman alleged that the government had faced "several challenges" because of the way the previous Congress-led government had handled things in the 10 years it ruled between 2004 and 2014.

RBI capped deposit withdrawals at Yes Bank at Rs 50,000 on Thursday

New Delhi:

Outlining a restructuring plan for Yes Bank after restrictions imposed by the RBI, Finance Minister Nirmala Sitharaman today lashed out at opposition criticism, stressing that the crisis originated on Congress watch. She also mocked senior Congress leader P Chidambaram, one of her predecessors, as a "self-appointed competent doctor" and questioned his track record.

"The opposition is very keen to point fingers on this. Not that I want to put a blame on them, but I have reason to do so," Nirmala Sitharaman told reporters.

She alleged that the Indian banking sector had faced "several challenges" because of the way the previous Congress-led government had handled matters in the 10 years it ruled between 2004 and 2014.

Yes Bank was placed under a moratorium on Thursday, with the Reserve Bank of India (RBI) capping deposit withdrawals at the bank at Rs 50,000 per account for a month and superseding its board.

"It is important for the media to know - the exposure of Yes Bank to some very stressed corporates has been there since before 2014 (when the BJP came to power). I wouldn't even mind taking their names because it is public domain information and I'm not violating any customer's privacy. Anil Ambani group, DHFL, IL&FS, Vodafone are some of the very stressed corporates to whom Yes Bank was exposed -this is from prior to 2014 (the UPA era)," Ms Sitharaman said.

"They are giving instances, saying Yes Bank is No Bank. The so-called self-appointed competent doctors were in charge when United Western Bank was almost on the verge of collapse in 2006 and was forcefully merged with IDBI. Today if I have problems restoring good health of IDBI, I am giving you examples of how self-appointed competent doctors had handled the United Western Bank merger with IDBI," said the minister. IDBI went down, she said, because of the merger.

The Finance Minister took no names, but her reference was apparently to the digs of Congress leaders like Rahul Gandhi and former finance minister P Chidambaram.

"No Yes Bank. Modi and his ideas have destroyed India's economy," Rahul Gandhi, the former Congress chief, said in a tweet targeting Prime Minister Narendra Modi.

Mr Chidambaram had earlier tackled the ruling BJP's assertion that the previous Congress government created the mess. The Yes Bank crisis "shows complete regulatory failure", he had said.

"I understand the Finance Minister has made a statement blaming the UPA.  That's normal for a government living in ignorance. Will she please explain how the loan book jumped in five years from Rs 55,633 crore to Rs 2,41,499 crore", tweeted Mr Chidambaram.

"Who knows, the finance minister may blame the UPA for the miraculous jump between 2014 and 2019!!!"

In another tweet, Mr Chidambaram said, "SBI (State Bank of India) 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."

Ms Sitharaman said she had repeatedly said she will not allow any institution to fall off a cliff.

Questioning Mr Chidambaram's handling of banks, she asked how many were taken to task by the UPA for problems at the banks.