Yes Bank crisis has exposed Modi govt's ability to govern financial institutions: Chidambaram

FM Nirmala Sitharaman on Friday assured the Yes Bank depositors that they need not worry and their money is safe.

NEW DELHI: Former Finance Minister and senior Congress leader P Chidambaram on Friday (March 6, 2020) slammed the Narendra Modi government over the Yes Bank crisis saying the government`s ability to govern and regulate financial institutions stands exposed.

"The BJP has been in power for six years. Their ability to govern and regulate financial institutions stands exposed. First, it was the 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?" Chidambaram said in a series of tweets.

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

"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 questioned in his tweet. "Will the government confirm that the loan book of YES Bank has grown under the BJP`s watch as follows: FY2014: Rs 55,000 crore, FY2015: Rs 75,000 crore, FY2016: Rs 98,000 crore, FY2017: Rs 1,32,000 crore, FY2018: Rs 2,03,000 crore and FY2019: Rs 2,41,000 crore," Chidambaram said.

Will the government confirm that the Loan Book of YES Bank has grown under the BJP’s watch as follows:

FY2014: 55,000 cr
FY2015: 75,000
FY2016: 98,000
FY2017: 1,32,000
FY2018: 2,03,000
FY2019: 2,41,000

— P. Chidambaram (@PChidambaram_IN) March 6, 2020

The former Finance Minister also urged the people to read the piece written by former Prime Minister Manmohan Singh`s analysis of the current situation in the country.

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? — P. Chidambaram (@PChidambaram_IN) March 6, 2020

Chidambaram said, "Manmohan Singh has spoken the truth. Will those in power heed his advice?" he tweeted.

The extremely critical tweets from the former Finance Minister came after Yes Bank was placed under a moratorium, 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.

Besides Chidambaram, former Congress chief Rahul Gandhi also hit out at Prime Minister Narendra Modi on the present crisis involving private sector lender Yes Bank and said that his ideas have destroyed the country`s economy.

"No Yes Bank. Modi and his ideas have destroyed India`s economy," Rahul Gandhi tweeted with the hashtag of NoBank. 

No Yes Bank.

Modi and his ideas have destroyed India’s economy.

#NoBank — Rahul Gandhi (@RahulGandhi) March 6, 2020

The Yes Bank has over 1,000 branches and 1,800-plus ATMs around the country which are under severe stress after the crisis erupted last night.

Meanwhile, Finance Minister Nirmala Sitharaman assured the Yes Bank depositors that they need not worry and their money is safe.

Shares of Yes Bank Ltd plunged 60% on Friday as panicky depositors rushed to withdraw funds after the central bank took control in a dramatic late-night move and limited withdrawals from the troubled lender.

The shock move by the Reserve Bank of India (RBI) followed months of steady deterioration in the financial position of the country`s fifth-largest private lender and growing concerns over governance. As thousands of customers rushed to pull out funds and tempers flared at overcrowded branches nationwide, police deployed in some states to help control the crowds.

Many business owners feared the central bank`s move would hit their operations too, as the lender, with 1,000 branches across India, has many commercial clients.

"I will struggle to pay salaries to my staff, or pay any of my vendors, because of the restrictions," said Chintan Patel, a building contractor in the western city of Ahmedabad.