MU says it has ₹141-crore fixed deposits in crisis-hit YES Bank

While the moratorium conditions continue on private lender YES Bank, it was revealed on Friday that the University of Mumbai (MU) has fixed deposits (FDs) worth

While the moratorium conditions continue on private lender YES Bank, it was revealed on Friday that the University of Mumbai (MU) has fixed deposits (FDs) worth ₹141 crore with the bank.

HT Image

On Friday, which was the second day of MU’s annual senate meet, members demanded a full explanation from the university on its finances. “The university postpones several projects in the name of lack of funds and despite claiming to be a transparent system, no one was made aware of the fact that ₹141 crore of the university’s funds are now redundant,” said a member. MU informed the senate that this amount had been deposited in FDs with YES Bank in February 2020.

Officials from varsity’s finance and accounts departments said ₹45 crore was deposited on February 11; ₹59 crore was deposited on February 20, and ₹37 crore was deposited on February 29 in the bank. The RBI imposed a moratorium on YES Bank on March 5.

Many senate members criticised MU for choosing to invest in a bank that has been in trouble since the start of the year. “We demand a high-level inquiry committee be set up to look into this particular issue as well as issues of misappropriation of funds in previous years as well,” said another member of the senate.

Senior MU officials have also questioned the delay in seeking National Assessment and Accreditation Council (NAAC) grade for the varsity for the fourth academic year in a row, pointing out that this delay had cost MU at least ₹350 crore in grants from various bodies.

Replying to the senate, MU’s spokesperson said the university was following government directives and its excess fund was invested in 12 banks in 2019 and nine banks in 2020; one of which is YES Bank.

“As per state government directives from October 2015, which directed all government institutes to invest all its excess and unused funds in banks with a net worth of at least ₹4,000 crore, we had called for online quotation on interest returns from different banks,” said the spokesperson, adding that this directive was adopted in August 2018. MU’s vice chancellor said a committee would look into further investments for the university. The university senate passed the annual budget of ₹809.24 crore for the 2020-21 academic year, almost ₹153 crore more than last year. The budget has also highlighted a deficit of ₹66.80 crore.