#MustRead: The recently released financial statement of PM’s National Relief Fund (PMNRF) for the financial year 2019-20 has revealed that the govt invested Rs 250 crore in Yes Bank Fixed Deposit Receipts even though the RBI had flagged concerns about the bank in 2018.
The investment was more than the Rs 222 cr that the Union govt gave as relief in the year which saw Covid-19, Cyclone Fani and severe floods.
This has raised concerns that Modi govt has converted the PMNRF into a corporate bailout vehicle instead of providing relief.
This has raised concerns that Modi govt has converted the PMNRF into a corporate bailout vehicle instead of providing relief.
The investment in Yes Bank was done even though in the beginning of 2019, the RBI had put a moratorium on the bank and Finance Minister Nirmala Sitharaman had stated that the central bank had been monitoring the Yes Bank since 2017.
In March 2020, two major clearing firms - NCL & ICCL - had announced that bank guarantees & FDRs issued by Yes Bank were no longer valid. It is not yet clear what the status of the PMNRF’s investment is. It will be evident only after the statement for 2020-21 is released.
Congress spokesperson @GouravVallabh pointed out that it was clear from the receipts and payment account for the year ending March 31, 2020, that Rs 250 crore FD with IDFC Bank might have got matured... 
And the same amount got reinvested in a bank which was suffering from huge NPAs & had violated corporate governance practices.
@SupriyaShrinate said questions must be raised on why the govt put money in a toxic asset such as @YESBANK when the govt was aware of what was happening
@SupriyaShrinate said questions must be raised on why the govt put money in a toxic asset such as @YESBANK when the govt was aware of what was happening
Public finance economist Arun Kumar asserted that this kind of investment could only happen if the government had certain interests in the bank. “The government should have invested in a public sector bank instead of a private bank which has already been cautioned by the RBI."
The statement has also brought to light that in FY 20, an additional Rs 385 crore was invested in State Development Loans. Only 15.7% remains as cash even though the govt has stated on the website that the relief fund has a balance of Rs 4393.19, which is misleading.
Even as FY 20 saw the beginning of the Covid-19 pandemic in the country, the government’s relief through PMNRF for medical assistance was just Rs 161.3 crore, only marginally higher than 2018-19, when it spent Rs 160.7 crore.
During the fiscal year, despite several natural calamities including floods in Kerala, Karnataka, Maharashtra and Gujarat during the year and Cyclone Fani devastating Odisha, the government spent only Rs 1.03 crore on rehabilitation and welfare measures.
Read More: nationalheraldindia.com/india/modi-gov…
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