India's Yes Bank founder Rana Kapoor arrested on money laundering charges
The founder of Yes Bank, Rana Kapoor, was arrested on Sunday
on allegations of money laundering, after being questioned for more than 20
hours by Indian authorities.
"He has been arrested as he was not cooperating in the
probe," an official of Enforcement Directorate, India's financial crime
investigating agency, told AFP news agency.
The Reserve Bank of India, the country's central bank,
seized control of Yes Bank on Thursday and capped withdrawals at 50,000 rupees
($695, €615) a month per depositor. The move came amid the troubled bank's
deteriorating financial health following defaults by firms to whom it had
loaned huge sums.
The State Bank of India, the country's largest lender, said Saturday
it was ready to invest 24.5 billion rupees for a 49% stake in Yes Bank as part
of a Reserve Bank of India-backed rescue plan.
"Twenty-three potential investors have approached us to
invest and they include some very good names," SBI chairman Rajnish Kumar
told reporters.
Indian Finance Minister Nirmala Sitharaman said on Friday a
restructuring plan for the bank would be implemented within 30 days.
But the limit on withdrawals had resulted in depositors
lining in front of Yes Bank ATMs and branches on Friday and Saturday in a
desperate bid to retrieve their savings. The bank has over 1,000 branches and
more than 1,800 ATMs across the country.
India has been grappling with a liquidity crunch caused by
the near-collapse more than a year ago of IL&FS, one of India's biggest shadow
banks.
Yes Bank's total exposure to shadow lenders and developers
was 11.5% as of September, according to Bloomberg News. The lender has been
struggling for some time to raise fresh capital to free itself of an increasing
pile of bad loans in order to quell worries about its viability.
India's economy has also slowed in recent months, with
annual growth now estimated to fall below 5% after years of much better
performance. This has added to strains on the financial sector.
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