FM says RBI to look into what went wrong at YES Bank

There’s already been some political signalling over the crisis. Congress MP Rahul Gandhi said on Twitter: “No Yes Bank. Modi a n d h i s ideas have destroyed India’s economy.”

Sitharaman sought to link it to alleged crony capitalism under the Congress-led United Progressive Alliance’s rule between 2004 and 2014 saying this was bound to happen if “Chacha-bhatija” (uncles and nephews) were being given loans.

“The RBI noticed that governance issues were of serious concern. There was definitely a culture of weak compliance. There were wrong asset classifications together with risky credit decisions. Since RBI started getting clear indicators, they took some concrete steps which they have informed about,” she added.

Still, in many ways, the crisis at Yes Bank was long foretold. The bank, especially under its former promoter and chairman Rana Kapoor, who was asked by RBI to relinquish his post in late 2018, lent money aggressively, and not always to the right companies. Some of its loans went to IL&FS, Dewan Housing, Jet Airways, Altico Finance, CG Power, Cox and Kings India, and Café Coffee Day, all companies that have been in the news over the past 18 months for the wrong reasons.

And around a fourth of its loans have been to companies in real estate, engineering, and financial services — the worst hit by the ongoing economic slowdown.

Indeed, around ₹30,000 of its loan book is below investment grade (or junk grade) corporate debt. That number is higher than its net worth of around ₹25,000 crore.

Its core capital is at 8.7% of risk-weighted assets, marginally higher than RBI’S threshold of 8%, but its non-performing assets were at 7.4% of advances (of around ₹300,000 crore).

Much of the crisis can be attributed to the bank’s inability to raise money, roughly $2-2.5 billion that it needs. After Kapoor’s exit, and after he and his family sold all of their stake in the bank, the new management has held forth the promise of a white knight, but none has come forward.

RBI itself has known about the crisis for at least a year and has had a nominee on the board.

The moratorium on withdrawals – RBI has said it will allow up to Rs 5 lakh in special cases, including for education, marriage, or medical reasons – has also spooked mutual funds (they have around ₹3,300 crore of investments in Yes’ bonds and shares). On Friday, shares of Yes Bank closed at ₹16.60, 55% down (₹20.20) after falling to as less as ₹9.65 at its lowest in the day. In the past year, the shares have lost ₹215.

Because of its linkages to the payment systems of several fintech companies, the crisis at Yes partially disrupted operations at companies such as Razorpay and Phonepe adding to the confusion in the financial system.

Analysts are worried that the near-collapse of a reasonably important bank (which has been on life-support for some time), could result in contagion across the broader financial system. ment. “We will definitely use it during the hearing of the review petition,” he said.

After the acquittal of the six men by the lower court, the state government formed a special investigation team (SIT) to probe the factors that led to the verdict. The team recommended that new evidences be gathered and the suspects named or identified by earlier investigating officers be probed because a charge sheet against a juvenile delinquent hadn’t yet been filed..

Khatana said the prosecution in the juvenile court may have looked at such new evidence, leading to the two juveniles’ conviction.

The SIT was formed on August 17 and gave its 84-page report to director general of police Bhupendra Singh on September 5.SIT pointed to loopholes in probes conducted by each of the four investigating officers of the lynching case. the Ram Manohar Lohia Hospital in the national capital.

A 24-year-old patient from Hyderabad, who had visited Dubai recently, has been isolated.

Another Italian man and his wife are being treated at Jaipur’s SMS hospital, and 14 members of a group of Italian tourists and their Indian guide, who were previously quarantined at the ITBP camp in Delhi’s Chhawla, have now been admitted to the Medanta hospital in Gurugram.

The total figure of positive cases includes the first three r eported f r om Kerala l ast month. All three- who were studying in China –have been discharged following a full recovery.

The number of coronavirus cases globally approached 100,000, as more infections were reported in the US, Germany, France and South Korea, while the Netherlands reported its first fatality on Friday.

There are now over 98,000 coronaviruses cases globally and more than 3,300 people have died, according to a Reuters tally. At the current rate of increase, that means that cases will top the 100,000 mark sometime later on Friday. suspended for the entire Budget Session. We don’t know on what basis this was done. We only want a discussion on the issue of Delhi violence.”

Amidst the noisy scenes, however, the House passed the Mineral Laws (Amendment) Bill.

The chair again adjourned the House for about 10 minutes till 12.45 pm.

When the Lok Sabha resumed business, it took up the Insolvency and Bankruptcy Code (Second Amendment) Bill amidst continuous protests by opposition lawmakers.

The Bill was declared passed by Rajendra Agarwal, who was in the chair. The House will reassemble on Wednesday (March 11) after the Holi break.

The Budget Session of Parliament, which resumed on March 2 , has witnessed f r e quent adjournments due to protests over the violence that erupted on February 24 and 25 in north-east Delhi.

ANALYSTS ARE WORRIED THAT THE NEARCOLLAPSE OF A REASONABLY IMPORTANT BANK