Yes Bank Crisis: Rana Kapoor stepped down as Yes Bank CEO in 2018 (File)
Yes Bank founder Rana Kapoor's house in Mumbai was today searched by the Enforcement Directorate, a day after the Reserve Bank of India took over the bank's board for a period of 30 days because of "serious deterioration in the financial position of the bank". A money laundering probe has been initiated against him, sources say.
The action comes on a day when Finance Minister Nirmala Sitharaman listed "malpractices" of "top leadership" among the reasons for the centre's decision to restructure the management of the bank.
The government on Thursday capped the withdrawal limit at Rs 50,000 for depositors of the beleaguered private lender.
According to an official notification issued by the finance ministry on Thursday evening, the cap will stay in effect till 3 April, 2020. The restriction is part of an order of moratorium issued by the government which also stayed the "commencement or continuance of all actions and proceedings" against the bank.
The RBI, in a separate release on Thursday, said the bank's board has been superseded for a period of 30 days. Former SBI CFO Prashant Kumar has been appointed as the administrator of the bank.
Ms Sitharaman held a press conference on Friday, and said the RBI had been monitoring issues related to Yes Bank since 2017.
"The RBI noticed that the governance issues were of serious concern. There was definitely a culture of weak compliance. There were wrong asset classifications together with risky credit decisions. Since RBI started getting clear indicators, they took some concrete steps which they have informed about," she was quoted as saying by news agency ANI.
"…in the meanwhile, investigative agencies pointed out malpractices of some of the members of their top leadership. A member resigned after CBI tightened the noose," Ms Sitharaman added.
Mr Kapoor, who had been the CEO of the bank since its creation in 2004, had to step down in September, 2018 after the RBI disapproved his request to extend his term.