Congress leader Karti Chidambaram took a dig at the Enforcement Directorate (ED) over the raids conducted at Yes Bank founder Rana Kapoor's residence. Taking to Twitter, he sarcastically stated "House Of Yes Bank Founder Rana Kapoor Searched By Enforcement Directorate. When in doubt let’s call in my favourite agency- ED." Taking a dig at the ED, he further added, "Nothing like a good raid to fix any issue."
In a massive development, sources reported that Enforcement Directorate (ED) is carrying out searches at Yes Bank founder and former MD-CEO Rana Kapoor at his residential premises in Mumbai's Samudra Mahal. Sources also reported that a case of Prevention of Money Laundering Act, 2002 (PMLA) has been registered against him. The ED is the only central agency to have registered a case against Kapoor till now.
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%.
Yes Bank started facing a crisis as it accumulated many bad loans in 2018 by lending to corporate defaulters such as DHFL, Jet Airways and Cafe Coffee day, among others. Moreover, when RBI refused to extend the term of founder Rana Kapoor as chief executive in 2018, its management was severely hit with his successor Ravneet Gill managing to raise only one round of funds through a share sale to institutional investors. In a bid to revive the bank, Gill has been in talks over the past 18 months with equity investors but could not come up with a concrete investment plan.