Amid Yes Bank crisis, Sitharaman assures depositors' money safe
Finance Minister Nirmala Sitharaman on Friday gave assurance to the depositors of cash-starved Yes Bank. On Thursday, the Reserve Bank of India (RBI) superseded the board of Yes Bank and imposed a Rs. 50,000 limit on cash withdrawals. As depositors of the lender panicked, especially considering a similar crisis in the recent past, Sitharaman assured them that their money was safe.
No loss to any Yes Bank depositor, says Sitharaman
Addressing the crisis, Sitharaman said that she is in "continuous interaction" with the RBI. Promising a quick resolution to the crisis, the FM said that no depositor of Yes Bank will incur any loss, adding that she was assured of the same by RBI Governor Shaktikanta Das. She said that the steps being taken are in the interest of depositors, banks and the economy.
'Assure every depositor their money is safe'
According to PTI, Sitharaman said, "I'm in continuous interaction with the Reserve Bank of India. The central bank is fully seized of the matter and has assured they will give a quick resolution. I want to assure every depositor that their money shall be safe." She added, "RBI Governor has assured me that there will be no loss to any depositor."
Yes Bank placed under moratorium till April 3
On Thursday, the RBI imposed a cap of Rs. 50,000 on cash withdrawal for Yes Bank depositors. The bank will be under moratorium till April 3, 2020. The RBI also superseded Yes Bank's board and appointed former State Bank of India CFO Prashant Kumar as the bank's administrator for the next month. The SBI also gave an "in-principle" nod to invest in Yes Bank.
What happened to Yes Bank?
For the past few months, Yes Bank had been struggling to execute a capital-raising plan. As of September, the lender's core equity tier-I ratio had fallen to 8.7%. It also delayed its December quarter results. The RBI said that Yes Bank also suffered "serious governance issues and practices in recent years" which contributed to the lender's steady decline.
