Why was Yes Bank crisis allowed to come to such a pass, Sibal asks govt

Senior Congress leader Kapil Sibal on Sunday demanded to know as to why the Union Finance Ministry and the RBI did not act earlier and allowed the Yes Bank crisis to come to such a pass where lakhs of its account holders are staring at a bleak future.

He also equated the government selling out public sector enterprises to meet the shortfall in tax collection with selling family silver to meet the expenses."The real question that arises is what was this government doing for so many years? We have known about Yes Bank and the difficulty it would be facing in the years to come. We knew that (bank's founder) Rana Kapoor had exited, so why was this allowed to happen?" Sibal told ANI over the latest bank crisis.

"The RBI nominee was on the Board since I think May 2019. What was he doing? They knew about the fact and about this crisis that Dewan Housing Finance Corporation Limited (DHFL) had been given loans by Yes Bank and a subsidiary of DHFL had given Rs 600 crores to Rana Kapoor's family. How was this allowed to happen and why did finance ministry not move earlier?

"After all, the banks come under the direct control and supervision of the Union Finance Ministry. So they would have known, the Finance Ministry would've known, (Finance Minister) Nirmala Sithraman ji would've known, and I am sure when Sitharaman comes in Parliament, she will blame the Congress party for this because when they have no answers, they always blame the Congress party," Sibal said.

Sibal said that those businesses who were dealing through Yes Bank and who transact in lakhs every month would be in dire straits after RBI putting a cap of Rs 50,000 on monthly withdrawals.

"They (government) don't care about poor ordinary people. People don't have money to spend. They don't care about institutions and their health. The economy is in a bad shape, what they are trying to do is to use the public sector to bail out banks. Now the State Bank of India apparently will invest Rs 10,000 crores. God alone knows that whether the bank (Yes Bank) will be able to revive or not," the Congress leader said.

He said that in the face of an economic crisis, the Finance Ministry is just "blank" and doesn't know what to do.

"It has no answers. Hope people need to give them an answer in the time to come," he added.

"As you know money is not coming from direct taxes, money is not coming from GST, there is a shortfall. Because of that shortfall they don't have money to spend on social welfare schemes.

"They don't have money, even for that they are selling the silver or gold at home, which are public sector enterprises in order to meet the expenditure. They are selling our gold. Whose money is it anyway? It's ours money. It's the money of an ordinary people's investments in the public sector," he said.