Battle of Finance Ministers: Chidambaram, Sitharaman trade charges over Yes Bank crisis

Finance Minister Nirmala Sithraman mounted a sharp rebuttal to senior Congress leader P Chidambaram’s attack on the Modi government’s handling of the crisis in the banking sector. Sitharaman accused the UPA of merging the crisis ridden banks with other banks then washing off their hands without fixing any responsibility.

New Delhi: Finance Minister Nirmala Sithraman on Friday mounted a sharp rebuttal to senior Congress leader P Chidambaram’s attack on the Modi government’s handling of the crisis in the banking sector, saying that the UPA never brought to book any person responsible for causing the collapse of three banks during its tenure.

In contrast to the UPA’s handling of the crisis in the banking sector, which did not fix the accountability of the people, the finance minister said she had asked the RBI to probe and fix the responsibility so that the law takes its own course with a sense of urgency.

She blamed high exposure of Yes Bank to stressed companies of Anil Ambani Group, Essel Group, DHFL, ILFS & Vodafone during UPA government’s tenure that led to the unraveling of the bank led by its founder and former MD & CEO Rana Kapoor, who was forced to step down in January last year as RBI declined the bank’s request for his extension.

She also blamed the merger of crisis hit United Western Bank with IDBI in 2006 for throwing the public sector lender off balance.

Finance minister Nirmala Sitharaman called for a press conference on Friday afternoon after Congress leader Rahul Gandhi and Former Finance minister P Chidambaram took jibes at Modi government for the Yes Bank crisis.

“BJP has been in power for six years. Their ability to govern and regulate financial institutions stands exposed,” former finance minister P Chidambaram had said in a tweet earlier today.

• 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?

  — P. Chidambaram (@PChidambaram_IN) March 6, 2020 " class="align-text-top noRightClick twitterSection" data="

  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?

  — P. Chidambaram (@PChidambaram_IN) March 6, 2020

  ">

  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?

  — P. Chidambaram (@PChidambaram_IN) March 6, 2020

Though Chidambaram was not the only Congress leader who had targeted the Modi government for the crisis in the banking sector, but perhaps it was his attack through a series of tweets that prompted the finance minister to call for a press conference in the afternoon and respond to his attacks in an elaborate manner.

“First it was PMC Bank. Now it is Yes Bank. Is the government concerned at all? Can it shirk its responsibility?” asked the former finance minister P Chidambaram asking “Is there a third bank in the line?”

It prompted finance minister Nirmala Sitharaman to launch a sharp rebuttal by citing examples of three crisis hit banks – Global Trust Bank (GTB), United Western Bank (UWB) and Ganesh Bank of Kurundwad (GBK) – that were merged with other banks by the UPA government to prevent their collapse.

Sitharaman accused the UPA of merging the crisis ridden banks with other banks then washing off their hands without fixing any responsibility.

While Global Trust Bank was merged with Oriental Bank of Commerce in July 2004, United Western Bank was merged with IDBI Bank and Ganesh Bank of Kurundwad was merged with private sector lender – the Federal Bank in 2006.

“I am giving you pointed example of how self appointed competent doctors who handled United Western Bank’s merger with IDBI. The IDBI went down and United Western was anyway challenged and that was the treatment offered by those who speak today about the way we have ensured that the interest of Yes Bank and its customers are kept safe. We are doing that,” said a visibly agitated finance minister.

“Let me ask how many people did they (UPA Government) take action on?” retorted the finance minister Nirmala Sitharaman.

However, the veteran Congress leader who was in charge of finance ministry for most part of former Prime Minister Manmohan Singh’s 10-year tenure between 2004 to 2014 was not to be left behind in this tit-for-tat verbal dual. He also rejected Nirmala Sitharaman's charge that the crisis in Yes Bank started to build during the tenure of UPA government.

• As expected, the FM has indirectly blamed the UPA for the near collapse of YES Bank contrary to her own claim that the crisis started in 2017.

  — P. Chidambaram (@PChidambaram_IN) March 6, 2020 " class="align-text-top noRightClick twitterSection" data="

  As expected, the FM has indirectly blamed the UPA for the near collapse of YES Bank contrary to her own claim that the crisis started in 2017.

  — P. Chidambaram (@PChidambaram_IN) March 6, 2020

  ">

  As expected, the FM has indirectly blamed the UPA for the near collapse of YES Bank contrary to her own claim that the crisis started in 2017.

  — P. Chidambaram (@PChidambaram_IN) March 6, 2020

"Listened to FM’s address to the media…as expected, the FM has indirectly blamed the UPA for the near-collapse of YES Bank contrary to her own claim that the crisis started in 2017, he said in a tweet soon after Nirmala Sitharaman’s press conference.

(Article by Senior Journalist Krishnanand Tripathi)