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Home / India / Financial mismanagement by Modi government to be blamed for the collapse of the banking sector: Chidambaram

Financial mismanagement by Modi government to be blamed for the collapse of the banking sector: Chidambaram

Yes Bank exploded with the RBI imposing a cap on withdrawals
Chidambaram tweeted: “The BJP has been in power for six years. Their ability to govern and regulate financial institutions stands exposed. First, it was PMC Bank. Now it is YES Bank. Is the Government concerned at all? Can it shirk its responsibility? Is there a third bank in the line?”

Our Special Correspondent   |   New Delhi   |   Published 06.03.20, 10:40 PM

The Congress said on Friday that financial mismanagement by the Narendra Modi government was to be blamed for the collapse of the banking sector while former finance minister P. Chidambaram hinted that another bank was in line after Yes Bank.

As the crisis in Yes Bank exploded with the Reserve Bank of India (RBI) imposing a cap on withdrawals, Rahul Gandhi tweeted: “No Yes Bank. Modi and his ideas have destroyed India’s economy.”

Chidambaram tweeted: “The BJP has been in power for six years. Their ability to govern and regulate financial institutions stands exposed. First, it was PMC Bank. Now it is YES Bank. Is the Government concerned at all? Can it shirk its responsibility? Is there a third bank in the line?”

As finance minister Nirmala Sitharaman and other BJP leaders tried to shift the blame on bad loans to the UPA government, Chidambaram reacted through a series of tweets.

“I understand the finance minister has made a statement blaming the UPA. That’s normal for a government living in ignorance. Does the FM know the numbers that I have tweeted? If she does, will she please explain how the loan book jumped in five years from Rs 55,633 crore to Rs 2,41,499 crore? Who knows, the FM may blame the UPA for the miraculous jump between 2014 and 2019!!!”

A little earlier, Chidambaram had tweeted: “Will the government confirm that the loan book of YES Bank has grown under the BJP’s watch as follows: Financial Year 2014: 55,000 cr, 2015: 75,000, 2016: 98,000, 2017: 1,32,000, 2018: 2,03,000, 2019: 2,41,000. When overall bank credit during the above period grew by about 10 per cent, how did YES Bank’s loan book grow by about 35 per cent?”

The former finance minister also tweeted: “Is it correct that SBI is exploring investment opportunity in YES Bank? Why should SBI invest in YES Bank? SBI should take over the loan book of YES Bank for one rupee, recover the loans, and simultaneously assure the depositors that their money will be safe and will be returned.”

Later at a media conference, the Congress pointed to wrong decisions and reckless financial management for the plight of the banking sector.

Party spokesperson Pawan Khera said: “An RBI representative was on Yes Bank board since May 2019. What was he doing? The government’s job is to provide solutions, not announce problems. Why were the warning signals ignored? For how long will the consumers bear the burden of the government’s mismanagement? The Modi government has made it difficult for common citizens to live with dignity.”

Asking the Government and BJP leaders not to mislead the nation, Khera said: “While the Yes Bank loans jumped from Rs 55000 crore in 2014 to Rs 2.41 lakh crore in 2019-20, the amount of fraud also increased dramatically. While fraud of Rs 18,699 crore was reported in 2015-16, the amount rose to Rs 23,933 crore in 2016-17, Rs 41,167 crore in 2017-18, Rs 71,500 crore in 2018-19 and Rs 1,43,068 crore till March 2019-20. Let the government tell the nation who are these people and how such frauds were allowed.”

Khera explained the “reckless and scandalous” decisions: “The Modi government has written off Rs 7,77,800 crore of bank loans and let them publish the list of beneficiaries. Also, let them explain why bank NPAs jumped to Rs 9 lakh crore. Why was the LIC forced to bail out IDBI, why ONGC invested in GSPC, why ILFS collapsed?”

He added: “This is the most incompetent Union cabinet, full of clueless ministers. The difference between Manmohan Singh and Narendra Modi is the difference between a doctor and a quack. Modi is not only ignorant of economy, he can’t tolerate capable persons. He feels insecure with talent. We can give several examples.”

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