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Yes Bank Latest News: Depositors’ safe money: Nirmala Sitharaman on the Yes Bank crisis | India Business News

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NEW DELHI: One day after the Reserve Bank of India (RBI) put Yes Bank with liquidity problems under moratorium, the Union finance minister Nirmala Sithraman said Friday that the government is in touch constant with RBI and that each depositor’s money is safe.

At a press conference, the finance minister cited significant gaps in the operation of Yes Bank, as noted by the RBI, which include poor compliance, an incorrect classification of assets and a risky credit decision.

She said the lender’s recovery plan hit by the crisis will come into play within the moratorium period (30 days) and clients will have no problems.

On the future of Yes Bank employees, the finance minister said: “The rebuilt bank employees will be re-elected with insured wages for at least one year.”

Sitharaman also noted that “Yes Bank’s exposure to some stressed companies, for example, the Anil Ambani group, the Essel group, DHFL, IL&FS and Vodafone were prior to 2014.”

“I am in continuous interaction with the RBI. The central bank is fully concerned with the matter and has assured that they will give a quick resolution. I want to assure each depositor that his money will be safe. The governor of the RBI assured me that there will be no loss for no depositor of Yes Bank, “Sitharaman said earlier that day.

Yes Bank Latest News: Depositors' safe money: Nirmala Sitharaman on the Yes Bank crisis | India Business News

Rana Kapoor, a veteran banker who never said no to risky loans

The word about Yes Bank in financial circles was that it was a lender who never said no to risky borrowers who had built a highly leveraged position. Veteran banker Rana Kapoor used his network capacity to lend and recover loans, distinguishing the bank from others that depended more on the process than on relationships.

The minister said that RBI as a regulator is working for the early resolution of the Yes Bank problem and the steps taken are in the interest of depositors, the bank and the economy.

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The immediate priority of the government is to ensure that Yes Bank customers can withdraw money within a limit of Rs 50,000, he added.

Yes Bank Latest News: Depositors' safe money: Nirmala Sitharaman on the Yes Bank crisis | India Business News

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.

On Thursday, the central bank limited deposit withdrawals at the bank to Rs 50,000 per account for one month and replaced its board. The bank will be led by the administrator appointed by RBI, Prashant Kumar, former financial director of SBI, during the next month.

Yes Bank Latest News: Depositors' safe money: Nirmala Sitharaman on the Yes Bank crisis | India Business News

RBI replaces the board of the Bank Yes, the withdrawal of ceilings in Rs 50,000

RBI has appointed the deputy managing director and chief financial officer of the State Bank of India, Prashant Kumar, as administrator of the Yes Bank. Although the central bank has said that the moratorium on cash withdrawals will last 30 days, sources said a plan involving SBI is in process.

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After this, the bank may not grant or renew any loan or advance, make any investment, incur any responsibility or accept to disburse any payment during the period.

Yes, the Bank has been struggling to execute a capital collection plan for the past six months. Its level I core capital index had fallen to 8.7 percent as of September.

The bank had also delayed its quarterly December results.

Shares of the private sector lender were liquidated 56.04 percent lower at Rs 16.20 in the BSE index on Friday. However, it had closed at Rs 36.85 on Thursday after an increase of more than 25 percent.

(With PTI tickets)

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