Former Union finance minister and Congress leader P Chidambaram on Saturday called for fixing accountability into the Yes Bank debacle and asked if no one in the Reserve Bank of India (RBI) or the government was accountable.
At a press conference, Chidambaram also described the State Bank of India’s rescue operation to bail out Yes Bas as bizarre.
“Resolution plan proposed by SBI for Yes Bank is bizarre when bank’s net worth is perhaps 0. It would be better for SBI to take over on RBI’s order with Yes Bank’s loan book at Re 1 and to assure depositors that their money will be returned,” he said.
He also said that the SBI was not a “volunteer” in the rescue operation for Yes Bank.
Also read: Blueprint to deal with Yes Bank crisis and beyond | Opinion
{{/usCountry}}Also read: Blueprint to deal with Yes Bank crisis and beyond | Opinion
{{/usCountry}}“SBI is not a volunteer in the rescue act just like the LIC was not a volunteer in the IDBI rescue act,” he said.
He said it was incomprehensible how no one seemed to notice Yes Bank’s ballooning loan book.
“Notice the jump from March 2014 to March 2019, loan book was allowed to grow, despite supervision by RBI and government at 35% a year. Also notice the spike in 2016-17 and 2017-18, two years after demonetisation. Is no one in RBI or govt accountable?” he asked.
“How did Rs 55,000 crore loan book in March 2014 jump to Rs 2,41,000 crore in March 2019 when I was not the Finance Minister?
Chidambaram said mismanagement and gross oversight led to the Yes Bank debacle.
“Who authorised grant of new loans after March 2014? Were RBI and the government not aware that Yes Bank was on a loan-giving spree? Did no one in RBI and government read the balance sheet of the Bank at the end of every year?”
Asked about finance minister Nirmala Sitharaman blaming the UPA government for the crisis at Yes Bank, Chidamabram said, “When I hear the finance minister, I feel the UPA is still in power and I am the finance minister and she is in the opposition.”
He asked the government to come clean on the fiasco and said, “Attempts should not be made to sweep things under the carpet.”
He warned that if the mismanagement continues “you will continue to lurch from one crisis to another.”