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Mumbai/New Delhi, March 6, 2020
The Enforcement Directorate (ED) filed a money laundering case and carried out searches at the residence of Yes Bank's founder Rana Kapoor, officials said.
The agency also issued a look out circular against Kapoor, so that he does not leave the country.
A senior ED official told IANS, "Yes, the agency registered a case of money laundering in the Yes Bank matter."
Confirming the searches carried out at Kapoor's residence in Mumbai by the agency, the official said, "Yes, the searches started late in the evening at his residence."
Another ED official, also related to the probe, said the agency has issued a look-out circular (LOC) against Kapoor, so that he does not leave the country. The copy of the LOC has been sent to the airports with details of his passport.
The ED's action comes a day after the RBI superseded the Yes Bank board for 30 days and appointed an administrator, putting a cap of Rs 50,000 on withdrawal by account holders for a month.
The RBI said that the bank's board was superseded "owing to serious deterioration in the financial position of the bank". Former SBI CFO Prashant Kumar was appointed as administrator of Yes Bank.
Yes Bank has over 1,000 branches and 1,800-plus ATMs across the country which are under severe stress after the crisis erupted last night.
Earlier in the day, Union Finance Minister Nirmala Sitharaman said that the bank was put under watch since 2017 and developments relating to it were being monitored on a day-to-day basis.
"Since 2017, the central bank noticed governance issues and weak regulatory compliance at Yes Bank, besides wrong asset classification and risky credit decisions," the Finance Minister said.
The bank took many risky credit decisions, and the RBI had advised change in management, she said, adding such decisions were taken in the interest of the bank's health. A new CEO was appointed in September 2018 and clean up of the bank started and the investigative agencies too found irregularities, she said.
Sitharaman said the RBI has been asked to assess the causes of problems and identify the role played by individuals.
The restructuring scheme will be fully effective within 30 days, she said, adding that the State Bank of India has expressed willingness to invest in Yes Bank.