SBI Is Offering 'Unfair Public Subsidy' To Yes Bank Owners, IAS Officer Ashok Khemka Writes To PM, RBI Governor

IAS officer Ashok Khemka, in a letter to Prime Minister Narendra Modi and Reserve Bank of India Governor Shaktikanta Das on Monday, asked several questions about the revival of Yes Bank. He argued that the State Bank of India (SBI) is providing an "unfair public subsidy" to current partners of the Yes Bank using the wealth of SBI shareholders.

Khemka said that the total capital of Yes Bank should be written down permanently, before infusing public money in any form.

"Yes Bank, like IL&FS, DHFL, PMC, is not a case of genuine business loss. The losses are due to fraud by its promoters, directors, management and overlooked by regulators, auditors, credit rating agencies, trustees and other statutory intermediaries," the bureaucrat wrote, appealing for action against entities.

He also suggested that the licences of auditors, credit rating agencies and trustees must be suspended or revoked. "Promoters committing fraud must be declared individually bankrupt and their wealth seized to repay creditors and depositors," the bureaucrat wrote in the letter.

The central bank announced a reconstruction scheme under which SBI would be taking a 49 per cent equity stake in the Yes Bank, infusing around ₹10,000 crore in the private lender.

The revival plan also covers permanently writing down the Additional Tier 1 capital of ₹10,800 crore raised by Yes Bank.

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