FM Nirmala Sitharaman Invokes United Western-IDBI Crisis, Attacks Congress Over Yes Bank


Nirmala Sitharaman launched a scathing attack on the Congress party stating that the 'exposure' of Yes Bank to stressed corporates happened during their term

Written By Ananya Varma | Mumbai | Updated On:

A day after Yes Bank was put under a moratorium by the RBI which superseded the bank's Board of Directors, Finance Minister Nirmala Sitharaman while addressing a press conference launched a scathing attack on the Congress party stating that the 'exposure' of Yes Bank to stressed corporates happened during the tenure of the Congress Party's then UPA government before 2014.

Read: 'No Yes Bank': Rahul Gandhi Attempts Wordplay And An Attack Over RBI's Moratorium

'Exposure of Yes Bank to stressed corporates during UPA Govt'

"This is public domain information. Yes Bank lent money to some of the very stressed corporations like Anil Ambani Group, Essel, Dewan Housing Finance Corporation (DHFL), Infrastructure Leasing & Financial Services Limited (IL&FS), and Vodafone. This was from prior to 2014," said Sitharaman. 

Read: Yes Bank Moratorium: Former FM P Chidambaram Sides With RBI, Here's What He Said

Congress attacks Govt over crisis

Since the decision of the RBI to take over Yes Bank was announced, the Congress party has been attacking the BJP-led Centre for allegedly 'abdicating its responsibility just like it did with the PMC scam'. Former Finance Minister P Chidambaram had earlier attacked the Centre asking it if there was a 'third bank in line' after the crisis of PMC, and now Yes Bank. 

"The BJP has been in power for 6 years, their ability to control and regulate financial institutions is being exposed. First PMC Bank, now Yes Bank. Is the government worried at all? Can he escape his responsibility? Is there a third bank in the line," tweeted Chidambaram.

Read: Yes Bank Under Moratorium: These Are The Red Flags That Indicated The Crisis Was Coming

'Do remember Western Union?' 

In a befitting reply to the opposition, Nirmala Sitharaman attacked the Congress party for the collapse of United Western Bank which happened during the Congress government which also snowballed into a financial crisis in the IDBI bank. "The Indian Banking system has had severe challenges thanks to the way the government which existed between 2004 and 2014 handled matters. I don't have to put a blame on them, I have reasons.

"So-called self-appointed competent doctors are saying this. And these so-called self-appointed doctors were responsible for what happened to United Western Bank. Do you all remember this? United Western Bank collapsed in 2006, forcefully merged with IDBI Bank. Today if I have problems restoring IDBI, this is a pointed example of how self-appointed competent doctors had merged the two and caused it. IDBI went down and United Western Bank collapsed," she said. 

RBI takes over Yes Bank for 30 days

On Thursday, RBI appointed former SBI CFO Prashant Kumar as administrator for Yes Bank and imposed a moratorium on the troubled lender capping its withdrawals at Rs 50,000, for a period of 30 days. The RBI stated that the decision was taken to a serious deterioration in the financial position of the bank and has been done to restore depositors' confidence in the bank. Yes Bank has also cancelled all fund withdrawal requests made by clients to their YES bank accounts and its stocks tumbled by 10%.

Read: BIG: RBI Unveils Draft Reconstruction Scheme Of Yes Bank, Invites Suggestions Till March 9

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