Former finance minister and Congress leader P Chidambaram on Friday termed Yes Bank crisis as a completely "regulatory failure" and said there is no need to panic as the Reserve Bank of India (RBI) placed restrictions on the bank.
"It shows completely regulatory failure and I wonder if this is the end or there will be more in the line. Yet the government keeps absolute silence. PMC bank depositors are agitating every day before RBI offices in Mumbai. But the government did not respond," Chidambaram told reporters here.
"Let's see what depositors of Yes Bank do. I think they are as worried as depositors of PMC Bank. Let's see what unfolds now. Obviously, there is no need to panic," he said.
He also said, "Resolution plan proposed by SBI for Yes Bank is bizarre when bank's net worth is perhaps zero. It would be better for SBI to take over, on RBI's order, Yes Bank's loan book at Rs 1 & to assure depositors that their money will be returned."
Chidambaram had earlier tweeted: "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?" RBI on Thursday said a "moratorium" has been imposed on Yes Bank stressing that the bank's financial capability has undergone a steady decline largely due to the inability of the bank to raise capital.
During the period of moratorium, the Yes Bank Limited shall not, without the permission in writing of the Reserve Bank of India, make, in the aggregate, payment to a depositor of a sum exceeding Rs. 50,000 lying to his credit, in any savings, current or any other deposit account.
