Yes Bank Depositor’s money safe, assures Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on Friday said the government has asked the Reserve Bank to look into what went wrong at Yes Bank and fix individual responsibilities.

Addressing a press conference after the RBI superseded the board of Yes Bank and placed withdrawal restrictions, she said the bank was being monitored since 2017 and developments relating to it were being monitored on a day-to-day basis.

Since 2017, the central bank noticed governance issues and weak regulatory compliance at Yes Bank, besides wrong asset classification and risky credit decisions, she said.

On finding risky credit decisions, the RBI advised a change in management, she said.

These decisions were taken in the interest of the bank’s health, and a new CEO was appointed in September 2018 and cleaning up of bank started, she said adding that investigative agencies too had found irregularities.

She said Anil Ambani Group, Essel, ILFS, DHFL and Vodafone were among the stressed corporates Yes Bank had exposure too. Sitharaman insisted the immediate priority to ensure Yes Bank customers are able to withdraw money within Rs 50,000 limit.

For the next month, Yes Bank will be led by the RBI-appointed administrator Prashant Kumar, an ex-chief financial officer of SBI.

The board of country’s largest lender State Bank of India on Thursday gave an “in-principle” approval to invest in the capital-starved Yes Bank.

Yes Bank has been struggling to execute a capital raising plan for the last six months. Its core equity tier-I ratio had slipped to 8.7 per cent as of September. The bank had also delayed its December quarter results.