HC seeks Centre, RBI reply on Swamy’s plea to probe Yes Bank asset transfer

The PIL seeks a direction to the Centre, SEBI and RBI to formulate comprehensive guidelines in accordance with the recommendations of the committee to check any such future transactions and to regulate the arrangements entered into between banks or other financial institutions and asset reconstruction companies.

The plea has been filed in the context of the transfer of a distressed asset portfolio worth Rs 48,000 crore from Yes Bank to JC Flowers last year.

“As per the information available in the public domain, the transactions involving the transfer of the distressed asset portfolio from Yes Bank to JC Flowers lack fairness, attempt to evade relevant laws, and do not serve the best interests of the general public who have accounts with Yes Bank,” the plea states.

It adds that this transfer is connected to another transaction in which Yes Bank has acquired up to 19.9% stake in JC Flowers.

The plea states that “these transactions were made to benefit” only JC Flowers, “at the expense of” Yes Bank’s customers and shareholders and “are harmful to the economic wellbeing of the country and do not prioritise the recovery of public funds”.

Swamy in the plea claims that he wishes to highlight the “growing rot” in the private banking sector, which has been further “accelerated by perpetual decay of corporate governance and ethical standards”.

The plea seeks immediate action on these transactions to “avoid the conclusion of this suspicious deal”.