NEW DELHI: The CPM said on Saturday that "collapse" of Yes Bank has raised many disturbing questions about the functioning of private banks and the failure of Reserve Bank of India to intervene in time and the episode was "the worst example of crony capitalism".
In a statement, CPI-M politburo said 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 during the rule of previous BJP-led NDA government.
"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 Modi government, despite their well-recorded precarious financial health," the party alleged. It said the RBI should immediately annul the limit of withdrawal set at Rs 50,000.
The party said that 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 jeopardising the interests of the depositors".
"The destructive influence of the current regime based on corporate cronyism on the Indian economy can no longer remain concealed," the party said. It said the State Bank of India is being asked to buy a stake of 49 per cent in the bank and it is imperative that the Yes Bank becomes a state-owned enterprise.
"It cannot become a case of privatisation of profits and nationalisation of losses. Safeguarding the interests of the depositors must be paramount," the party said.