YES Bank Crisis: FM Nirmala Sitharaman Says 'Centre, RBI Monitoring Private Lender Since 2017'; Asks RBI to Probe Matter
Union Finance Minister Nirmala Sitharaman said that both the Centre and Reserve Bank had been monitoring the YES Bank since 2017 and have noticed governance issues. She had RBI has been asked to probe the matter.
New Delhi, March 6: Union Finance Minister Nirmala Sitharaman on Friday said both the Centre and Reserve Bank had been monitoring the YES Bank since 2017 and have noticed governance issues. Apart from this, the Union Minister also said that there were wrong asset classifications together with risky credit decisions by YES bank, which the RBI is monitoring now.
Briefing the press conference in national capital on YES Bank Crisis, Sitharaman said, "Since 2017, RBI has been continuously monitoring & scrutinizing Yes Bank. It noticed that there were governance issues and weak compliance in the bank. There was a wrong asset classification together with risky credit decisions." YES Bank Crisis: Reserve Bank Caps Withdrawals at Rs 50,000, Appoints Former SBI Chief Financial Officer as Administrator.
Adding more, she said, "RBI noticed that there were governance issues and weak compliance in YES Bank. There were wrong asset classifications together with risky credit decisions." Stating that RBI has been given the charge to probe the matter, she said, "Have asked RBI to assess what caused these difficulties for YES Bank and to identify role played by various individuals in the problem."
Stating more, she said that SEBI had noticed malpractices by top executives in March 2019. Sitharaman said, "YES Bank lent money to some of the very stressed corporations like Anil Ambani Group, Essel, Dewan Housing Finance Corporation (DHFL), Infrastructure Leasing & Financial Services Limited (IL&FS), and Vodafone."
She even assured the depositors again that their money is safe and the government is committed to safeguard their interest. The FM said, "Government is completely committed to ensure that depositor's interest is safeguarded." She also said that deposits and liabilities will not be affected, while employment and salaries are assured for at least one year.
Meanwhile, she informed that RBI had put in a scheme for restructuring of YES Bank, though which it is expected to fully come into play within 30 days so that depositors are not troubled for too long. Apart from the following development, Sitharaman said that geniune attempts are being made to equity infusion into YES Bank but it did not materialise, though State Bank of India has expressed willingness to invest in the cash-crunched bank.
Earlier on Thursday evening, Reserve Bank of India put YES Bank under a moratorium and capped deposit withdrawals at Rs 50,000 per account for a month for customers. Following this, panic grew among the depositors in the fifth largest privat sector bank, who complained that neither the ATMs, net banking or mobile banking was working.
(The above story first appeared on LatestLY on Mar 06, 2020 05:30 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).