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press conference after the RBI superseded the board of Yes Bank and placed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.