Deposits Unaffected, Employees’ Salary Assured: FM on Yes Bank

Sitharaman said the immediate priority was to ensure depositors are able to withdraw money within the stated cap.

Updated
India
3 min read

Addressing a press conference in the national capital on Friday, 6 March, Finance Minister Nirmala Sitharaman said that the matter of Yes Bank is not something that came up just yesterday and added that the government has been aware of its weak compliance issues, poor governance and risky credit issuing habits since 2017.

She added that deposits and salary of the employees are assured for a year.

She assured that a lot of "genuine efforts were being made to "bring new equity but nothing materialised.”

“Deposits and liabilities will continue unaffected. Employment and salary of the employees are assured for one year.”
Finance Minister Nirmala Sitharaman

Sitharaman further said that the investing agencies have noted malpractices by "chairman-level" people.

"RBI has assured me that the restructuring plan, now available on their website, will come in play within 30 days,” she added.

She also said that the moratorium is in place for next 30 days only.

Sitharaman also told the press that Anil Ambani Group, Essel, DHFL, ILFS, Vodafone etc. are some of very stressed corporate whom Yes Bank lent.

Earlier in the day, Finance Minister Nirmala Sitharaman said that she can assure all depositors of Yes Bank that their money was safe, a day after the Reserve Bank of India imposed a moratorium on the capital-starved bank, capping withdrawals at Rs 50,000 per account for a month.

She added that the RBI governor Shaktikanta Das had assured her that there would be no loss to any Yes Bank depositor.

“Both RBI and the government are looking at the Yes Bank issue in detail,” she said, adding that they have taken a course which will be in everyone's interest.

FM Blames UPA, Chidambaram Hits Back

In the press conference, Nirmala Sitharaman blamed the UPA, hinting bad loans allotted in the UPA regime put pressure on corporates. She also said "Indian banking system has had many challenges, thanks to the previous government".

P Chidambaram gave a scathing response to FM's statements in a series of tweets. He said "FM was focused on what happened during the UPA. What happened was UPA did not allow any bank to reach a state of collapse. Under UPA, weak banks were merged with other banks well in time to avoid a crisis."

"What is the government doing today? Is the government not merging weak public sector banks with stronger public sector banks? Naturally, FM blamed the “legacy” of UPA. She will say that for the rest of the tenure of the BJP government!"
P. Chidambaram

Moratorium Imposed by RBI

The board of Yes Bank has been superseded with immediate effect, the RBI said on Thursday.

"...the Central Government, after considering an application made by the Reserve Bank of India under sub-section (1) of that section, hereby makes an Order of Moratorium in respect of Yes Bank Limited," a statement by the Finance Ministry reads.

It adds that it would also put a stay on the "commencement or continuance of all actions and proceedings against the banking company during the period of moratorium."

Former SBI CFO Prashant Kumar has taken charge as administrator for Yes Bank.

“I want to assure every depositor’s money is safe, and I’m in constant touch with RBI,” Sitharaman said, speaking to the media.

She also said that their immediate priority was to ensure that Yes Bank customers are able to withdraw money within the stated Rs 50,000 cap imposed by RBI.

(With inputs from PTI.)

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