Yes Bank Failure Due to UPA Government: Nirmala Sitharaman

New delhi date. March 7, 2020, Saturday

Finance Minister Nirmala Sitaram blamed the Congress-led UPA government on Friday for the failure of the Yes Bank, or the way the central government and the Reserve Bank delayed taking action.

He made a statement twice a day saying that the way the lending was done before 2014, the way the lending was done without any kind of scrutiny, has worsened the condition of the banks and hence the Modi government is now cleaning up.

Finance Minister Sitharaman's claims

Finance Minister Nirmala Sitaram made 'two records' on Friday at a press conference. One, since the year 2017, the Reserve Bank has been keeping track of the operations of Yes Bank and is investigating it.

Based on this investigation, the promoter was fired in the bank in 2018 and the new CEO was subsequently appointed. He also claimed that malpractices by top officials like the bank chairman or his like were under investigation. (Former promoter and chairman of the bank fell into the ranks of the Enforcement Directorate at Rana Kapoor's evening)

Another claimed that "before 2014 (before the BJP came to power), Yes Bank financed a corporate whose condition was poor. I am not violating any bank's privacy by taking the names of some customers like Anil Ambani Group, Dewan Housing, IL&FS, Vodafone. All these loans were given while the UPA government was in power, "the finance minister said.

Earlier, Finance Minister Sitharaman said depositors 'money was secure outside Parliament, adding that before 2014, banks were giving loans to every uncles' nephew.

In fact, the finance minister was saying that Yes Bank's long book was too big, too expensive for the government of the UPA government, and loans were given to everyone who did not have the ability to repay. However, this is not true.

Yes Bank's loanbook growth has tripled in the last six years

Since the bank was established in 2004, till September 2019, the results of Yes Bank, bank loan and bank deposit statistics are available. The Reserve Bank has put Yes Bank in the Moratorium before the results for the quarter ended December 2019 were to be announced so God knows when those numbers will be released!

From March 2004 to March 2014, the total deposit of Yes Bank increased to Rs. 74,192 crore and the total credit of the bank was Rs. 55,633 crore. After March 2014, the bank aggressively increased lending and deposits.

The total credit of the bank at the end of September 2019 was Rs.2,24,505 crore and the deposit was Rs.2,09,497 crore. After deducting next year's credit, it is understood that the credit of Yes Bank increased by Rs.168,872 crore and deposits increased by Rs.136,505 crore during the five-year period from March 2014 to September 2019.

The above data shows that the credit growth of Yes Bank has accelerated since the Modi government took power in 2014. In the last five and a half years, bank credit has increased three-and-a-half times compared to the ten years of Congress rule. The way the finance minister has targeted the UPA government is unnecessary and it is only an attempt to hide the failure of the present government.

The investigation lasted for three years?

The finance minister himself is speaking on the record that the Reserve Bank has been monitoring the performance of Yes Bank since 2017 and their operations are under investigation. So why haven't any measures been taken for three years?

Yes Bank's credit at the end of March 2017 was Rs.1,32,262 crore which was Rs.2,24,505 crore at the end of September 2019, which means that the lending increased by Rs92,243 crore during the period. Why did this financing come to fruition despite the Reserve Bank's obsession? An additional deposit of Rs.66,624 crore was also deposited during this period.

Why didn't people today guarantee that the deposit was secure? The Finance Minister said that according to the Reserve Bank, the administration of the corporate governance, ie officers, is not right in this bank, it has come out that the NPA hid and lend itself without studying risks.

Yes it is certain and the whole world knows what the problem with Yes Bank is. Loan lending by Yes Bank is increasing (ie the loan is not being repaid), the bank's losses are increasing and the bank's financial position is constantly deteriorating as credit rating is weakening. In some cases, the bank's investors and depositors are also withdrawing money, so the situation is worsening.

The bank has been weakening in the last few years as there have been many cuts in the administration of the bank. Although the bank has continuously tried to raise more capital, the situation has not improved. The Reserve Bank has also helped. On February 12, some investors in the bank were ready to hold the capital but no capital came.

In its investigation from 2017, the Reserve Bank has taken only two firm steps. One, Rana Kapoor has been removed from the board and the other is a fine of Rs 1 crore for violating the rules! With such a big problem, such a trivial step was taken when the leading private sector bank of the country was weakening and it is no longer a matter of dignity of the finance minister to blame the others!