Congress leader Rahul Gandhi on Friday hit out at the government over the crisis at Yes Bank, alleging that Prime Minister Narendra Modi has destroyed India’s economy. “No Yes Bank. Modi and his ideas have destroyed India’s economy,” he wrote on Twitter.
On Thursday, the Reserve Bank of India suspended the Yes Bank board of directors for 30 days over “serious deterioration in financial position” and imposed withdrawal limit of Rs 50,000 on its account holders till April 3.
Gandhi’s party colleague and former union minister P Chidambaram reminded the government of the Punjab and Maharashtra Bank crisis and said that its ability to govern and regulate financial institutions stands exposed. “First, it was PMC Bank. Now it is YES Bank,” he tweeted. “Is the government concerned at all? Can it shirk its responsibility? Is there a third bank in the line?”
However, Bharatiya Janata Party Information Technology Cell chief Amit Malviya hit back at both leaders, saying it was Chidambaram who should be blamed for the “mess” Indian banks and the economy are facing today.
Responding to Gandhi’s tweet, Malviya wrote, “No Rahul, it is P Chidambaram, your former finance minister, who is responsible for the mess India’s banks and economy are in,” attaching with it a video of former Samajwadi Party leader Amar Singh, who Malviya referred to as a “former Congress ally”.
In the video clip, Amar Singh blames Chidambaram for the economic slowdown, alleging that non-performing assets of banks increased because of the policies adopted by the former finance minister under Congress’ rule. Singh also claims to have evidence of the various errors Chidambaram made to substantiate his charges.
RBI said on Thursday that it had no alternative apart from imposing restrictions on the bank. “The Reserve Bank came to the conclusion that in the absence of a credible revival plan, and in public interest and the interest of the bank’s depositors, it had no alternative but to apply to the Central Government for imposing a moratorium under section 45 of the Banking Regulation Act, 1949.” RBI assured depositors that their interests will be protected and said there was “no need to panic”.
Yes Bank’s stock prices crashed by 85% on Friday after RBI’s moratorium and hit low of Rs 5.65 on the National Stock Exchange. Combined with fear over the coronavirus outbteak, the bank crisis caused markets to fall by 3%. The BSE Sensex fell 1,459.52 points to 37,011.09 in the opening session, while the National Stock Exchange Nifty tanked 362.30 points to 10,906.70. At 2:05 pm, Sensex was trading 936 points lower at 37,534.42 while Nifty was down by 291 points.
Finance Minister Nirmala Sitharaman on Friday assured people that their money was safe. “The Reserve Bank of India Governor has assured me there will be no loss to any Yes Bank depositor,” she said at a press conference in Delhi. Earlier in the day, RBI Governor Shaktikanta Das had said that the central bank will soon come up with a scheme to revive Yes Bank.
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