The Enforcement Directorate (ED) on Friday night conducted raids at the house of YES Bank founder Rana Kapoor in Mumbai, a day after the Reserve Bank of India (RBI) superseded the board of troubled private sector lender and imposed a 30-day moratorium on it “in the absence of a credible revival plan” amid a “serious deterioration” in its financial health.

The raids were conducted in connection with a money laundering probe against him and others, said ED officials.

The ED has also issued a lookout circular against Kapoor and other former directors of YES Bank to prevent them from leaving the country as it is investigating Kapoor’s role in the release of a loan to a corporate entity and receiving alleged kickbacks in his wife’s accounts. The agency is investigating some other  irregularities as well, added officials.

The move comes a day after RBI capped the withdrawals from the bank at Rs 50,000 with few exceptions till April 3. During the moratorium, which came into effect from 6 pm on Thursday, YES Bank will not be allowed to grant or renew any loans, and “incur any liability”, except for payment towards employees’ salaries, rent, taxes and legal expenses, among others.

As panic gripped the customers of the bank, Union Finance Minister Nirmala Sitharaman earlier on Friday assured the depositors that their money is “safe”.

Amidst concerns,  Sitharaman on Friday had defended RBI’s decision to impose curbs on crisis-hit YES Bank stating that the Central bank has been continuously monitoring and scrutinizing the private sector lender since 2017.

On the present development, Sitharaman said the RBI had noticed that there were governance issues and weak compliance in the bank combined with a wrong asset classification and risky credit decisions.

“We had been keeping an eye on the bank since 2017,” Sitharaman had said at a press briefing on Friday evening.

Meanwhile, the Reserve Bank of India has announced a scheme of reconstruction for the cash-strapped private sector lender in a notification issued on Friday evening.

In a draft reconstruction plan for the crisis-ridden Yes Bank, the RBI said that SBI has expressed willingness to invest in the private lender and that it will bring in 49 per cent equity.

It also said that Yes Bank’s capital stands altered at Rs 5,000 crore.

The RBI has invited suggestions and comments from members of the public, including the banks’ shareholders, depositors and creditors on the draft scheme. The draft has also been sent to YES Bank and the SBI for their comments. The RBI will receive suggestions up to Monday (March 9) and thereafter, take a final view.

The other points of the draft are that all deposits with Yes Bank will continue in the same manner and with the same terms and conditions, completely unaffected by the scheme. Authorised capital shall stand altered to Rs 5,000 crore and the number of equity shares will stand altered to Rs 2,400 crore of Rs 2 each. The investor bank shall agree to invest in the equity of reconstructed Yes Bank to the extent that post infusion, it holds 49 per cent shareholding in the reconstructed bank at a price not less than Rs 10 (face value of Rs 2) and premium of Rs 8.

Earlier on Friday, RBI Governor Shaktikanta Das said the Central bank took the step after it found that the private sector lender’s efforts were not working out.
Das further said the RBI is ready to deal with the challenges of the move very effectively’ and added that “very swift action” will be seen from the Central bank to revive YES Bank.

The YES Bank has over 1,000 branches and 1,800-plus ATMs around the country which are under severe stress after the crisis erupted last night.