FM says RBI to look into what went wrong at Yes Bank

PTI

New Delhi: Union Minister for Finance and Corporate Affairs Nirmala Sitharaman during a meeting with industry and other bodies on contextual challenges and oppurturnities in supply chain of exports and imports, in New Delhi, Tuesday, Feb. 18, 2020. (PTI Photo)

New Delhi: Union Minister for Finance and Corporate Affairs Nirmala Sitharaman. (PTI Photo)

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Addressing a press conference after the RBI superseded the board of Yes Bank and placed withdrawal restrictions, she said the bank was being monitored since 2017 and developments relating to it were being monitored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 Finance Minister also said that employment and salary of Yes Bank employees has 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.

Finance Minister 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 interest 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.

(PTI)