Yes Bank founder Rana Kapoor was taken by the Enforcement Directorate to its Mumbai office today for questioning. The agency has also conducted raids at the homes of his three daughters - Roshni Kapoor, Rakhee Kapoor Tandon and Radha Kapoor. The raids come after Mr Kapoor's residence was searched, last evening and today, and he was questioned over "malpractices" by "top leadership" that led to a "serious deterioration in the financial position" of one of the country's largest private lenders.
The Enforcement Directorate began its probe after a money laundering case under the Prevention of Money Laundering Act (PMLA) was initiated based on details from an investigation into Dewan Housing Finance Corporation Limited (DHFL).
The case against DHFL promoter Kapil Wadhawan, and his brother Dhiraj Wadhawan concerned the alleged purchase of properties belonging to the late drug baron Iqbal Mirchi. A case has been registered in this matter and Kapil Wadhawan, who was arrested in January, is currently out on bail.
The Enforcement Directorate alleges that Yes Bank granted loans to DHFL and, around the same period, crores of rupees were transferred to accounts linked the family of Yes Bank founder Rana Kapoor; these accounts included those belonging to his wife.
Yes Bank was placed under a 30-day moratorium on Thursday, with the Reserve Bank of India (RBI) capping deposit withdrawals at the bank at Rs 50,000 per account, in a move that triggered widespread panic, and superseding its board.
A lookout circular has been issued against Mr Kapoor to stop him from leaving the country.
The government-run State Bank of India (SBI), which has been tasked with rescuing Yes Bank, is conducting due diligence on restructuring plans, SBI Chairman Rajnish Kumar told reporters today, adding that options would be presented to the RBI by Monday.
SBI, the country's largest lender by assets, will take a 49 per cent stake in Yes Bank.
Meanwhile, Yes Bank assured customers that their deposits are safe. A letter by Prashant Kumar, a former chief financial officer with SBI, said "a solution is being worked upon" to resolve the crisis before the expiry of the RBI's moratorium.
On Friday Finance Minister Nirmala Sitharaman hit out at the Congress, blaming the opposition for the crisis. She also mocked former Finance Minister P Chidambaram, who yesterday said the situation was a "complete regulatory failure" and criticised the government for keeping "absolute silence.
"The opposition is keen to point fingers on this. Not that I want to put a blame on them, but I have reason to do so," Ms Sitharaman told reporters, alleging the banking crisis - which saw a similar problem hit the Punjab and Maharashtra Co-operative Bank last year - was caused by the Congress-led UPA government that was in power from 2004 to 2014.
Rana Kapoor was chief executive officer of Yes Bank from its creation in 2004. However, he had to step down in 2018 after the RBI disapproved his request to extend his term.
Yes Bank shareholders suffered huge losses in trade on Friday as the stock plunged 56 per cent to close at Rs 16.20.
In December credit ratings major Moody's lowered its outlook on the bank, saying actions by the authorities highlight the continued uncertainty around private sector bank resolutions in the country.