‘Both Previous and Current Govts Equally Responsible’
When asked about the role of the political dispensation in the matter and the blame game that the Bharatiya Janata Party (BJP) and the Congress resorted to when the crisis came to the fore, Moharkan argued that the responsibility lies on both governments equally.
“The irrational loan growth started after 2014. We had a policy where the RBI had very high interest rates in 2014, because of inflation and various other reasons. There was a wild goose chase in the economy till 2014. So, the RBI started easing the interest rates after 2014 and that is when Yes Bank started lending recklessly. If you see the loan book, it started growing recklessly after 2014,” he said.
“I am not saying that the previous dispensation would have been a saint in case of Rana Kapoor or when dealing with Rana Kapoor. But it has to be equally blamed on both dispensations. Secondly, what was the government doing at the end of it all? The government knew it would be a systemic risk if Yes Bank fails and yet, till 5 March 2020, Yes Bank was at a brink of collapse. The government did nothing,” Moharkan said.