The crisis that hit India’s 4 largest private sector Bank – Yes Bank Crisis is clear indication Raghuram Rajan was worried about, during his term as Governor of RBI.
After PMC bank crisis, now it is India’s largest Private sector bank facing a financial crisis.
But what is RBI and Government doing about it? Why these machineries exist? Aren’t they supposed to keep an eye on banks?
Below chart data from https://www.ceicdata.com/ which clearly indicates the banking condition of Non Performing loan after the resign of Raghuram Rajan and during Modi government in power.
Yes Bank Crisis – If you don’t invest big, you don’t grow big – Rana Kapoor. The statement made by former MD and CEO of Yes bank Rana Kapoor clearly indicates the aggressive behavior towards lending money to the distressed company.
Rana Kapoor who promised in 2018 that he would never sell his stake and would transfer his share to his daughters was a bluff. He sold his entire stake in 2019 for Rs 57000 crore.
One of senior person at Yes Bank said to live mint that Rana used to pump crores in publicity. And he never used to say No to corporate companies to lend money. Yes bank which said Yes to all the borrowers has wiped crores of rupees of depositors and investors.
NPA started to show up in lately in 2018 due to defaults of repayment and bankrupt company. Some of which include Anil Ambani’s Reliance, ILFS, DHFL, Cafe Coffee Day, ESSEL group, COX & KINGS, ESSAR OIL, Vodaphone etc.
But still RBI, SEBI and Government were silent on the issue. Such behaviour of these machineries would not only lead to losing trust but questioning their existence.
PMC crisis bought 11,000 crore rupees bad loan and 800 + employees lost their jobs. Now, the fourth largest private bank bought 2 lakhs crore loan default.
We cannot compare these bank as YES bank is much bigger in size than PMC bank. But the event can be comparable. PMC bank has given loan to HDIL from 2008 to 2019 despite and paying the previous loans.
RBI in PMC put Rs.1000 cap on withdrawal and now in case of YES bank capping is Rs.50,000 per account.
ED raided Directors of HDIL in PMC crisis and CEO Rana Kapoor in YES bank crisis. ED didn’t act back then nor it acted on time during Yes Bank Crisis.
Now, Government is ready to rescue private bank from tax payers money. What about PMC bank rescue?
Do not hide your responsibility behind the rescue plan. YES Bank crisis clearly indicate the irresponsible behavior of RBI and and Central Government. We need to ask question on why RBI was silent on NPA’s of YES bank. Why didn’t Government intervened in matter after NPA’s of bank hit record high.
Now, the rescue plan is SBI buying 49 percent stake in Yes bank at 2400 crore. Will that solve the problem of NPA. Infact the burden is now shifted on the SBI.
It is alleged that Yes bank has reported less NPA in the Financial Statements by 3400 crores. What did SEBI was doing? Was Auditors and Management equally responsible for mis-statement.
I have been under psychiatric treatment… I have been sick for the last 18 months since I lost my baby (Yes Bank) … statement made in court by Rana Kapoor. The baby he sold for Rs.57000 in Nov 2019. Rana Kapoor and his daughters has been arrested for money laundering of Rs. 4000 crore.
ED counsel Sunil Gonsalves alleged that depositors money was used to purchase the debentures of DHFL in 2018 without any collateral.
Gujarat based company, a Special Purpose Vehicle (SPV) of the Vadodara Municipal Corporation (VMC), withdrew Rs 265 crore from Yes Bank a day before the Reserve Bank imposed a moratorium, an official said here on Friday. What is their link with government?