The Delhi High Court has directed the Reserve Bank of India and the Centre to explain why they decided to secure the interest of the depositors of scam-hit Yes Bank with a ‘Reconstruction Scheme’ as opposed to Punjab and Maharashtra Cooperative Bank (PMC), another scam-hit bank.
“What has emerged upon perusal of the (Centre’s) notification is that, both, the RBI as well as the UOI (Union of India) had a crucial role to play in the decision taken to: permit, firstly, the Reconstruction Scheme being brought into play and, secondly, to have it funded,” Justice Rajiv Shakdher said.
“The RBI will file an affidavit as to what propelled it to take action in the ‘public interest’ to secure the interest of the depositors of Yes Bank and the reason why the Union of India accorded sanction to the Reconstruction Scheme,” the High Court remarked.
“The affidavits will delve into the aspect as to how the depositors of PMC Bank are differently circumstanced in comparison to the depositors of Yes Bank,” the court observed.
Centre’s affidavit
While the Centre, in its affidavit, stated that it has not invested any funds in Yes Bank, the High Court was informed that the investors, which includes the State Bank of India (SBI), had invested in the share capital of Yes Bank, upon sanction being accorded to it by the Centre to the Reconstruction Scheme. “The affidavit of UOI will indicate as to the shares it holds in SBI and the representation it has on the SBI’s Board of Directors,” the High Court ordered.
