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Pointless Lutyens’ Fearmongering Over Yes Bank Crisis

The Lutyens brigade has started fearmongering yet again. This time on the issue of superseding the board of cash-hit Yes Bank.

Instead of instilling confidence in depositors, it is creating panic in them, saying that they have to stand in big queues and they would not get their money back for a very long period.

It also is not emphasising on the reasons for Yes Bank’s downfall.

So, before decimating the fearmongering tactics of the Lutyens brigade, it is necessary to know the reasons for the bank to come to such a pass.

The banks are suffering because of UPA-1 and UPA-2’s gross abuse of fiduciary power. These regimes had robbed public and private sector banks, by lending to those industrialists and businessmen, who were close to the residents of 10 Janpath.

After getting the loans, these very corporates used to get another loan to repay a part of its earlier loan. This went on for a decade, which resulted in piling up of NPAs. In 60 years of Indian Independence, the NPAs were at Rs 18 lakh crore, but it rose to Rs 52 lakh crores, from 2008-2014.

Not only this, the UPA also cleverly hid NPA figures, to continue lending loans to defaulters like Nirav Modi, Anil Ambani and Vijay Mallya, to name a few.

The present crisis in Yes Bank also is a result of UPA’s thuggish schemes. It lent to the stressed out firms of Anil Ambani Group, Vodafone, Essel, DHFL, ILFS among others. The bank has an exposure of Rs 13,000 crore to Reliance group entities and another Rs 3,300 crore to Essel group companies.

The bank under the leadership tried to raise fund for its operations, but failed. Therefore, Nirmala Sitharaman in a swift action directed the RBI to take over the bank and draft a reconstruction scheme.

The draft scheme has already been sent to Yes Bank and SBI for their comments.

The suggestions and comments will be received by RBI up to March 9. Thereafter, RBI will take a final take on it.

RBI reportedly is preparing to offer a special liquidity window for the bank as urgent financial support to the troubled private sector lender and soothe the frayed nerves of depositors.

The RBI, reportedly, is likely to extend a short-term loan of credit to the bank of around Rs 8,000-Rs 10,000 crore to reduce panic among depositors and ensure sufficient funds for permitted withdrawals.

The premier banker also has assured of resolving the issue in next 30 days.

The SBI, on the other hand, has shown interest to buy 49 per cent of Yes Bank’s share capital of Rs 5,0000 crore by investing Rs 2,450 crore.

In fact, SBI has already informed the exchanges saying its board has given in-principle approval to explore an investment opportunity in the beleagured bank.

The fearmongering, therefore, by the Lutyens brigade is unwarranted and uncalled for.

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