The CPI(M) termed the Yes Bank crisis the "worst example of crony capitalism" and said it raised disturbing questions about the "failure" of the Reserve Bank of India to intervene in time.
The RBI on Thursday placed the capital-starved Yes Bank under a moratorium, capped deposit withdrawals at Rs 50,000 per account for a month and superseded its board.
In a statement, the Left party said record shows that the loan account of the bank increased spectacularly from Rs 55,633 crore in March 2014 to Rs 2,41,999 crore in March 2019.
"The bank was saddled with huge loans given to corporates favoured by the ruling regime. Some of these corporate debtors like Anil Ambani were backed to the hilt by the (Narendra) Modi government, despite their well-recorded precarious financial health.
"The collapse of Yes Bank has raised many disturbing questions about the functioning of private banks and the failure of the regulator, the Reserve Bank of India, to intervene in time. The Yes Bank episode is the worst example of crony capitalism," it said.
The party also alleged that even though the shenanigans indulged in by the promoter and the board of the bank were known for quite some time, the RBI did not act in time thereby jeopardizing the interests of the depositors.
"The destructive influence of the current regimen based on corporate cronyism on the Indian economy can no longer remain concealed.
"Now that the State Bank of India is being asked to buy a stake of 49 per cent in the bank, it is imperative that the bank become a state-owned enterprise. It cannot become a case of privatization of profits and nationalization of losses. Safeguarding the interests of the depositors must be paramount. The RBI should immediate annul the limit of withdrawals set at Rs. 50,000," the CPI(M) said.
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