NEW DELHI: Union Finance Minister Nirmala Sitharaman on Friday (March 6, 2020) said that the Reserve Bank of India (RBI) was continuously monitoring and scrutinizing the crisis-hit Yes Bank as she sought to reassure the bank’s depositors that their money was safe and they need not panic.


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“Since 2017, RBI has been continuously monitoring and scrutinizing Yes Bank. It noticed that there were governance issues and weak compliance in the bank. There was a wrong asset classification together with risky credit decisions,’’ the FM said in her press briefing to allay concerns of thousands of the bank’s depositors.


The Finance Minister further stated, “I have asked the RBI to go into assessing what has caused these difficulties for the bank and clearly identify the roles played by various individuals in creating the problem and not addressing it.’’


Sitharaman further stated that all deposits, liabilities will be honoured and salary assured for at least a year, adding that the steps taken by the RBI are in the best interest of the Yes Bank depositors.


''I have asked the RBI to act so that the due process of law takes its course with a sense of urgency. Investigative agencies, SEBI noticed malpractices by top executives in March 2019,'' she said.


The FM had earlier assured the bank’s depositors that their money is safe. "I want to assure every depositor's money is safe, and I'm in constant touch with RBI. The RBI Governor (Shaktikanta Das) has assured me that the matter will be resolved soon. Both RBI and government of India are looking at this," the FM said.


"I've personally monitored the situation for a couple of months along with RBI & we have taken the course that will be in everybody's interest," she added. Assuring the depositors, she said that the steps that are taken are in the interest of the depositors, the bank and the economy.


Meanwhile, the RBI also announced a revival scheme for crisis-hit Yes Bank. The RBI today placed in the public domain a draft scheme of revival the crisis-hit Yes Bank, the public lender which has been put under the control of the central bank. 


The RBI had invited suggestions and comments from members of the public, including the banks' shareholders, depositors and creditors on the draft scheme. The draft scheme has also been sent to Yes Bank and SBI for their comments. RBI will receive suggestions up to Monday, March 9, and thereafter take a final view.


RBI Governor Shaktikanta Das earlier told media "We took the step (of putting it under moratorium) when we found that Yes Bank efforts were not working. Depositors` interests will be fully protected." Das maintained that a decision has been taken not only to deal with the problem in the individual entity but also to maintain the resilience of the Indian financial sector. 


Earlier on Friday, State Bank of India (SBI) Chairman Rajnish Kumar said the problem at hand is lender-specific and not sectoral. "The RBI has said they will come out with a restructuring plan (for Yes Bank)," Kumar told reporters after meeting Sitharaman.


The resolution will come "very shortly," he said without elaborating. "This is not a sectoral problem. It is a bank-specific problem," he said, adding "The RBI will take all steps to ensure financial stability."On SBI picking up a stake in Yes Bank, he said the lender already has an in-principle approval for doing so, adding "If SBI has to pick up a stake in Yes Bank, we have an in-principle approval for that." 


On Thursday, the Reserve Bank placed Yes Bank under a moratorium and imposed limits on withdrawals. The RBI capped withdrawals from Yes Bank at Rs 50,000 for the next one month from March 4 to April 3, 2020. 


The apex bank also imposed strict limits on operations after the cash-starved lender faced "regular outflow of liquidity" after an effort to raise new capital failed.