The Enforcement Directorate (ED) has arrested Rana Kapoor, the founder of capital-starved Yes Bank, on fraud charges after questioning him for two days.
The ED had Friday, March 6 registered a money laundering case against Kapoor and raided his Samudra Mahal residence at Worli, Mumbai, in connection with the large sum of loans granted to Dewan Housing Finance Ltd (DHFL). He was taken to the ED office for questioning on Saturday.
The development has come days after the government issued an order of Moratorium against the bank following the Reserve Bank of India's (RBI) application. The central bank superseded the board of Yes Bank, the fifth-largest private lender in the country, for a month and capped withdrawals at Rs 50,000 until April 3.
A notification issued by the finance ministry last evening also stayed the "commencement or continuance of all actions and proceedings" against the bank after it failed to service its debts as big firms to whom it had loaned large sums defaulted.
According to investigators, the Yes Bank founder's wife allegedly received kickbacks in exchange for a large sum of loans given to some big firms. The case is linked to the loans granted to scam-tainted DHFL, which turned sour, the investigators said. A loan of Rs 600 crore given to the DHFL is also under the scanner of the financial probe agency.
The ED is also probing the alleged fraud in the Employees Provident Fund in the Uttar Pradesh Power Corporation Ltd. The Central Bureau of Investigation (CBI) is probing the Rs 2,267 crore EPF fraud where employees' money was invested in DHFL.
Customers can withdraw money from ATMs, says Yes Bank
Amid reports that customers are not being able to withdraw money from ATMs, the bank put out a tweet late Saturday night saying that depositors can extract money from Yes Bank and other banks' ATMs. "You can now make withdrawals using your YES BANK Debit Card both at YES BANK and other bank ATMs. Thanks for your patience," the crisis-hit bank tweeted.
Yes, Bank customers have complained that they are facing difficulties while accessing internet banking and using ATMs to withdraw money from Yes Bank after RBI's sudden announcement to supersede the bank's board and cap withdrawals at Rs 50,000 a month. Several companies having current accounts in Yes Bank said that they were unable to pay their debt and salaries to their employees.
FM assures limit on withdrawals is temporary
Finance Minister Nirmala Sitharaman assured depositors that their money was safe and the limit on withdrawals was temporary. She held a meeting with the RBI to chalk out a reconstruction plan for the Yes Bank. The State Bank of India (SBI), the country largest state-run bank, meanwhile said that it will take a call by Monday to buy 49 per cent stakes in the bank.
