The Enforcement Directorate (ED) on Saturday continued questioning YES Bank founder Rana Kapoor in Mumbai as he was brought to the agency’s office in the Ballard Estate area in afternoon, after on Friday night ED conducted raids at his residence in Mumbai under the Prevention of Money Laundering Act (PMLA).

Kapoor’s daughters Rakhee Kapoor Tandon, Roshni Kapoor and Radha Kapoor are also under scanner and being raided for allegedly being the beneficiaries of the scam.

The raids were conducted in connection with a money laundering probe against him and others, said ED officials. They are 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 ED’s probe under the PMLA was initiated based on details from an investigation into  Dewan Housing Finance Corporation Limited (DHFL). The DHFL promoters Kapil Wadhawan, and his brother Dhiraj Wadhawan are facing probe in buying properties belonging to the late drug baron Iqbal Mirchi, who was known as the right-hand man of criminal, Dawood Ibrahim.  Kapil Wadhawan was arrested in January in this case and is currently out on bail.

According to ED, YES Bank granted loans to scam-hit DHFL and the loans  allegedly turned into non-performing assets (NPAs), ED officials said. Around the same time, huge sums of money were transferred in accounts of people linked to family members of  Kapoor, including his wife.

The ED registered a money laundering case against Kapoor as a continuation of its probe against the DHFL wherein it was allegedly found that Rs 12,500 crore was diverted to 80 shell companies using one lakh fake borrowers. The transactions with these shell companies date back to 2015.

News agency IANS quoted NIA official (in Delhi) as saying that “the DHFL probe revealed that funds diverted by the DHFL originated from YES Bank.”

Earlier, on Thursday, the Reserve Bank of India (RBI) superseded the board of troubled private sector lender and imposed a 30-day moratorium on it “in the absence of a credible revival plan” amid a “serious deterioration” in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 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.

SBI chairman Rajnish Kumar, today said that the bank has time till Monday to respond back to the Reserve Bank of India (RBI) on the draft scheme for the rescue of YES Bank and it may or may not pick up 49 per cent stake.

The SBI chief further said the bank’s legal team has been doing “due diligence” on the draft scheme proposed by RBI.

“Plan has been received by SBI and the legal team is working on the plan. We had informed through the stock exchange that SBI board has given in-principle approval of exploring the possibility of picking up a stake of up to 49 per cent in YES Bank,” Kumar said at a press conference in Mumbai.