Top
Millennium Post

Yes Bank depositors' money safe: Fin Min

New Delhi: Union 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Addressing a press conference after the RBI superseded the board of Yes Bank and placed withdrawal restrictions, she said the bank was being monitored since 2017 and developments relating to it were being monitored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 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 the RBI has been asked to assess the causes of problems and identify the role played by individuals.

The government, she said, wants the RBI to ensure that due process of law is followed with a sense of urgency.

The restructuring scheme will be fully effective within 30 days, she said adding that State Bank of India has expressed willingness to invest in Yes Bank.

The Union Finance minister also added that employment and salary of Yes Bank employees have been assured for one year. She said Anil Ambani Group, Essel, ILFS, DHFL and Vodafone were among the stressed corporates Yes Bank had exposure to.

She retorted back at senior Congress leader and former finance P Chidambaram saying United Western Bank collapsed in 2006 under the "self-appointed competent doctors."

"We are ensuring customers' interests are protected," she said. "We can assure all depositors that their money is safe."

"I am closely monitoring every institution which requires that kind of monitoring along with RBI," she added.

Meanwhile, RBI Governor Shaktikanta Das said Yes Bank resolution efforts are aimed at maintaining "stability and resilience" in the Indian financial sector and the difficulties will be overcome "very swiftly".

The 30-day moratorium deadline is an "outer limit", he said, reiterating that the interests of depositors will be "fully protected".

Shares of Yes Bank came under massive selling pressure on Friday, plunging 56 per cent at close after the cash-strapped lender was placed under a 30-day moratorium.

On the BSE, the scrip sank 56.04 per cent to close at Rs 16.20 as investors deserted the counter. During the trade, it nosedived 84.93 per cent to Rs 5.55 — its 52-week low. It plummeted 54.89 per cent to close at Rs 16.60 on the NSE.

The broader market was also hit hard, with the BSE benchmark Sensex tanking 893.99 points to close at 37,576.62.

Yes Bank on Friday said Prashant Kumar, former deputy managing director and CFO of State Bank of India, has taken charge as its administrator.

"In line with the above, Prashant Kumar, ex-DMD and CFO of State Bank of India, who has been appointed as the Administrator by the Reserve Bank of India under Section 36ACA(2) of the Banking Regulation Act, 1949, has taken charge with effect from today," Yes Bank said in a BSE filing. Yes Bank stock was trading 71.51 per cent down at Rs 10.50 on the BSE.

Next Story
Share it