Failure to get equity into Yes Bank prompted RBI action: Fin Min Sitharaman

While giving background of the Reserve Bank of India’s (RBI’s) action against Yes Bank, finance minister Nirmala Sitharaman, said that attempts to get equity into Yes Bank did not materialize.

The finance minister was addressing a press conference todayevening, a day after the Reserve Bank of India (RBI) imposed a moratorium ondebt-ridden Yes Bank. She has already assured that every depositor’s money issafe despite the RBI capping withdrawal at Rs.50,000 per person.

   

“I am in continuous interaction with RBI. RBI hasassured that they will find a quick resolution. I want to also assure everydepositor that their money shall be safe. Steps that are taken now are in theinterest of depositors, bank and the economy. There are doubts among depositorsbut I assure their money is safe,” Sitharaman had said earlier in the day.

‘Employment, salary of employees of Yes Bank assured for oneyear; deposits, liabilities will be unaffected,” said Sitharaman at apress conference to assure the depositors and employees alike.

Essel, DHFL, ILFS, Vodafone are some of the very stressedcorporates whom Yes Bank has lent to, said the union minister.

RBI sought changes in Yes Bank management after findingrisky credit decisions, said Sitharaman.

Investigating agencies too found irregularities in Yes Bank,said Sitharaman on what went wrong with the private lender.

RBI has been monitoring Yes Bank since 2017 and noticedgovernance issues, weak compliance, wrong asset classification, saidSitharaman.

“I have asked RBI to act so that the due process of lawtakes its course with a sense of urgency,” said the finance minister.

“I have asked RBI to go into assessing what has causedthese difficulties for the bank and clearly identify the roles played byvarious individuals in creating the problem and not addressing it,” shefurther said.

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