Finance Minister Nirmala Sitharaman (Photo Credit: IANS)
Finance Minister Nirmala Sitharaman has hit back at Congress leader P Chidambaram for his jibe over crisis-hit Yes Bank saying ‘self-appointed competent doctors’ created more problems in handling crisis at three banks during the UPA regime. Sitharaman was reacting to Chidambaram’s loan book swelling five times under the BJP rule remark. She blamed the former finance minister for the crisis at Global Trust Bank in July 2004 and the problems at IDBI which had to merge with on-the-verge of collapsing United Western Bank in 2006.
The Congress-led UPA had come to power in May 2004 and Chidambaram was the finance minister. Addressing a press conference after the RBI superseded the board of Yes Bank and placed withdrawal restrictions, she said the crisis-hit lender’s exposure to stressed corporates dates before 2014.
“The exposure of Yes Bank to some of the very stressed corporates has been before 2014. These are public domain names and I am not violating any customer privacy? Anil Ambani (Group), Essel Group, DHFL, IL&FS (and) Vodafone are some of the very stressed corporate to whom Yes Bank has been exposed,” she said.
Sitharaman said she is revealing these names as the opposition parties were “very keen to point fingers”.
“I am not here to continue carrying the stories of legacy. Yes, the Indian banking system has had severe challenges thanks to the way in which the government which existed between 2004-14 had handled the matter. I have reasons to put the blame on them,” she said.
Sitharaman went on to question Chidambaram’s handling of the crisis at two banks under the UPA-1 rule.
“So-called self-appointed competent doctors” were in charge when United Western Bank was “almost on the verge of collapse in 2006 and was forcefully merged with IDBI,” she said. “Today if I have problems restoring good health of IDBI, I am giving you good examples of how self-appointed competent doctors had handled UWB merger with IDBI.”
IDBI, she said, went down because of UWB. “That was the treatment offered by those who speak today.”
“We have ensured that the interest of customers is kept safe, we are doing that. Their solution for UWB has resulted in IDBI also losing” its base, she said adding Global Trust Bank was merged with OBC and Ganesh Bank of Kurudher was merged with a private bank.
“Easy merge it and wash your hands off,” she said. “In all three you merged and washed your hands off.”
The former finance minister Chidambaram had in a series of tweets questioning the crisis at Yes Bank and asked why should state-owned State Bank of India (SBI) invest in the beleaguered lender.
When overall bank credit between 2014 and 2019 grew by about 10 per cent, Yes Bank’s loan book grew by about 35 per cent, he said. “Who knows, FM may blame the UPA for the miraculous jump between 2014 and 2019 !!!”
“I understand FM 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?”
In another tweet, Chidambaram said, “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.”
Sitharaman said she has repeatedly said that she will not allow any institution to fall off a cliff.
“I do remember I said in the context of non-banking finance companies and we have been a daily basis monitoring the banking and shadow banking institutions,” she said.
Questioning Chidambaram’s handling of banks, she asked action against how many people were taken by the UPA to task for the problems at banks.
“And here you see them quickly jump to say ‘oh no no you don’t know what you are doing? You don’t know how you are handling the economic affairs’,” she said. “We are ensuring the customers’ interest is intact, we are ensuring that depositors are assured and money is safe. You forcefully merge it off, let go off offenders and now ask questions uncomfortable for yourself.”
Stating that she has no problem answering questions on the handling of the economy, the minister said her government’s approach so ensures institutions don’t collapse and that they are kept in good health and interest of customers and depositors are kept safe.
“We assure all the depositors that their money is safe. We shall ensure that speedily this will be resolved and restructuring will happen in the interest of depositors and economy,” she added.
With PTI Inputs