NEW DELHI: In a political twist to the Yes Bank crisis, Union finance minister Nirmala Sitharaman has named the stressed corporate customers of the private sector lender from the pre-National Democratic Alliance (NDA) government era after a political blame game erupted following the debacle at the lender’s which had prompted the Reserve Bank of India to place it under moratorium late on Thursday.
The central bank also capped withdrawals from the bank at ₹50,000 per person across acounts.
Reliance Group, Essel Group, DHFL, IL&FS and Vodafone Idea were caught in the political crossfire.
Sitharaman questioned the Congress party’s track record in managing the banking system and named four groups with exposure to Yes Bank which are currently in distress.
During a press briefing on Friday, Sitharaman told reporters that it was important for the media to know that the exposure of Yes Bank to “some of the very stressed” corporate houses took place prior to Prime Minister Narendra Modi’s government came to power in 2014.
“I wouldn’t even mind taking their names as they are in public domain and I am not violating any customer’s privacy. Anil Ambani Group (Reliance Group), Essel Group (of Subhash Chandra), DHFL (Dewan Housing Finance Corp. Ltd.), Infrastructure Leasing & Financial Services Ltd. and Vodafone are some of those very stressed corporates to whom Yes Bank has been exposed. This is prior to 2014,” said the minister.
Emails sent to Reliance Group, Essel Group, DHFL, IL&FS and Vodafone Idea remained unanswered at the time of publishing. Vodafone India and Idea Cellular were merged in 2018.
Sitharaman’s comments followed Congress party’s tweet on Friday urging Prime Minister Modi to contain the spread of coronavirus, withdraw or amend the Citizenship (Amendment) Act and put together a detailed fiscal stimulus plan to revive the economy.
“I see the Opposition very keen to point finger at us. I am not here to continue carrying the stories of legacy. The Indian banking system has had severe challenges, thanks to the way in which the government which existed between 2004 and 2014 had handled the matter,” Sitharaman said.
The minister also said the merger of United Western Bank with IDBI in 2006 when UPA was in power had adversely impacted the health of IDBI. “I have reasons to put blame on them. I will give you instances. The self-appointed doctors are the ones who handled the United Western Bank, which was almost on the verge of collapse in 2006, with the IDBI,” she said.
Sitharaman also referred to the merger of Global Trust Bank with Oriental Bank of Commerce in 2004. The big change now in dealing with crisis at banks is holding those responsible to account, rather than ordering a merger and washing one’s hands off, she added.