India’s Yes Bank Founder Held On Fraud Charges

Yes Bank founder Rana Kapoor was arrested on money-laundering charges amid efforts to formulate a rescue plan for the country’s fourth-largest private lender, Reuters reported on Sunday (March 8).

Kapoor was arrested by India’s Enforcement Directorate, the country’s federal financial crime agency said.

“I want to cooperate with them,” Kapoor told the court. “I’m willing to cooperate day and night despite the fact that I haven’t slept a wink.”

Zain Shrof, Kapoor’s lawyer, believes his client was “a scapegoat” due to “public outrage against Yes Bank after India’s central bank placed the bank under a moratorium and imposed limits on withdrawals.”

The Reserve Bank of India (RBI) took control of Yes Bank on Thursday (March 5) and said it would work on a revival plan. State Bank of India is looking to invest funds for a 49 percent stake in Yes Bank.

The bank is the third significant Indian financial institution to unravel in the last six months, following the RBI’s moves to take control of Dewan Housing and Punjab & Maharashtra Co-operative Bank.

Last week finance minister Nirmala Sitharaman said Yes Bank had granted loans to entities including bankrupt Dewan Housing and Finance.

The Indian government has seized control of its fourth-largest private bank as it organizes a bailout plan and temporarily limits how much depositors can withdraw, according to reports on Friday (March 6). The Reserve Bank of India (RBI) said that “it had no alternative” but to step in with a rescue plan for Yes Bank and replace the lender’s entire board.