Senior Congress leader and former finance minister P Chidambaram on Saturday hit out at the BJP government’s “mismanagement of financial institutions” in the wake of the crisis that has hit private lender YES Bank.

Best judge of management of economy is the market. Yesterday Sensex fell by 884 points, price of an SBI share fell by ₹ 18, rupee (to USD) declined by 54 paise, price of an YES Bank share fell from ₹ 36.80 to ₹ 16.15; actually it’s worthless: @PChidambaram_IN #DontBankOnBJP

— Congress Live (@INCIndiaLive) March 7, 2020

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He further termed RBI’s resolution plan for the crisis-hit YES Bank as “bizarre”.

“…Plan appears that SBI will invest Rs 2,450 crore to pick up 49% stake in restructured capital of Bank at a price not less than Rs 10 per share (face value Rs 2). This is bizarre, when the net worth of the Bank is perhaps zero,” Chidamabaram said at a press briefing.

He said a better option would be for the SBI to take over, under the orders of the RBI, loan book of YES Bank at one rupee and assure all depositors that their money is safe and will be returned.

I said yesterday that better option would be for SBI to take over, under orders of RBI, loan book of YES Bank at one rupee and an obligation to assure all depositors that their money is safe and will be returned: @PChidambaram_IN #DontBankOnBJP

— Congress Live (@INCIndiaLive) March 7, 2020

He added that the SBI should simultaneously, make every effort to recover as much as possible of the outstanding loans. “There are other options that can be explored in consultation with former Governors Dr C Rangarajan and Dr YV Reddy,” the Congress leader said.

Putting out some numbers regarding the outstanding loans of YES Bank, the former finance minister questioned why the loan book was allowed to grow between March 2014 and March 2019 at 35 per cent a year despite being under the supervision of RBI and the Central government.

Notice the jump from March 2014 to March 2019, loan book was allowed to grow, despite supervision by RBI & govt @ of 35% a year. Also notice the spike in 2016-17 & 2017-18, two years after demonetisation. Is no one in RBI or govt accountable?: @PChidambaram_IN #DontBankOnBJP

— Congress Live (@INCIndiaLive) March 7, 2020

He also put out a series of questions as to who authorised the grant of new loans after March 2014; were RBI and the government not aware that YES Bank was on a loan-giving spree and did no one in RBI and government read the balance sheet of the private lender at the end of every year.

Chidambaram further questioned why no alarm bells rang when YES Bank reported its first-ever quarterly loss in the quarter, January-March 2019.

Laying down the restructuring scheme for YES Bank, Finance Minister Nirmala Sitharaman had on Friday countered criticism by the opposition, saying that the crisis originated under the watch of Congress-led UPA government.

The Finance Minister said that India’s banking sector faced several challenges owing to the way the UPA government had handled matters during 2004 and 2014.

She noted that the opposition is saying that YES Bank is now “No Bank”.

“The so-called self-appointed competent doctors were in charge when United Western Bank was almost on the verge of collapse in 2006 and was forcefully merged with IDBI. Today if I have problems restoring good health of IDBI, I am giving you examples of how self-appointed competent doctors had handled the United Western Bank merger with IDBI,” the minister said.

She observed that IDBI Bank went down because of the merger.

Countering Sitharaman’s remarks, Chidambaram said: “Sometimes when I listen to the Finance Minister, I feel the UPA (Congress-led United Progressive Alliance) is still in power, I am still the finance minister and she is the opposition.”

After months of reported monitoring, the Reserve Bank of India on Thursday superseded the board of troubled private sector lender YES Bank and imposed a 30-day moratorium on it “in the absence of a credible revival plan” amid a “serious deterioration” in its financial health.

The RBI on Friday came out with the “draft reconstruction scheme” under which SBI will bring in Rs 2,500 crore for a 49 per cent stake in the private sector bank.

In its draft ‘YES Bank Ltd. Reconstruction Scheme, 2020′ announced, the RBI said that SBI has expressed willingness to invest in the private lender and that it will bring in 49 per cent equity. It also said that SBI cannot reduce holding to below 26 per cent before three years from the date of capital infusion.

However, SBI chairman Rajnish Kumar today said the bank has time till Monday to respond back to the RBI on the draft scheme for the rescue of YES Bank and it may or may not pick up 49 per cent stake.