Nirmala Sitharaman at Yes Bank: RBI to investigate what went wrong at Yes Bank | India Business News
Rumita Patel
NEW DELHI: Finance Minister Nirmala Sitharaman said Friday that the government has asked the Reserve Bank to investigate what went wrong at Yes Bank and fix individual responsibilities.
When addressing a press conference after the RBI (Reserve Bank of India) replaced the Yes Bank board and placed withdrawal restrictions, he said the bank was being monitored since 2017 and that developments related to it They were being monitored day by day.
Since 2017, the central bank has noted governance problems and weak regulatory compliance at Yes Bank, in addition to incorrect asset classification and risky credit decisions, he said.
When finding risky credit decisions, the RBI advised a change in management, he said.
Have an account with Yes Bank, this is what you need to know
In an unprecedented move, the Reserve Bank of India (RBI) replaced the Yes Bank board and limited its withdrawal limit by placing it under a moratorium. The holder of a salary account should look for alternative ways to obtain the salary amount if it exceeds Rs 50,000, even if they have multiple accounts. It is likely that other general banking transactions will not be affected.
These decisions were made in the interest of the bank’s health, and a new CEO was appointed in September 2018 and the bank’s cleanup began, he said, adding that the investigation agencies had also found irregularities.
She said the RBI has been asked to evaluate the causes of the problems and identify the role played by the people.
The government, he said, wants the RBI to ensure that due process is followed urgently.
SBI has shown interest in investing in Yes Bank: RBI
The RBI said Friday that the State Bank of India (SBI) has expressed its willingness to invest in a Yes Bank in crisis. In a draft of the ‘Yes Bank Ltd Reconstruction Plan, 2020’, the RBI also said that the strategic investment bank will have to acquire a 49 percent stake and cannot reduce ownership to less than 26 percent before three years from the date of the infusion of capital.
The restructuring scheme will be fully effective within 30 days, he said and added that the State Bank of India (SBI) has expressed its willingness to invest in Yes Bank.
The finance minister also said that the employment and salary of Yes Bank employees have been insured for one year.
She said Anil Ambani Group, Essel, ILFS, DHFL and Vodafone were among the stressed companies to which Yes Bank had exposure.
The finance minister responded to congressional leader and former finances P Chidambaram saying that United Western Bank collapsed in 2006 under “self-appointed competent doctors.”
“We are ensuring that the interests of customers are protected,” he said. “We can assure all depositors that their money is safe.”
“I am closely monitoring each institution that requires that type of monitoring together with RBI,” he added.
