Yes Bank depositors need not worry, their money is safe, says FM Nirmala Sitharaman

The RBI has capped withdrawals from Yes Bank at Rs 50,000 till April 3, 2020, and imposed strict limits on operations after the cash-starved lender faced "regular outflow of liquidity" after an effort to raise new capital failed.

Image courtesy: Reuters

New Delhi: A day after the RBI superseded the board of private sector lender Yes Bank, Union Finance Minister Nirmala Sitharaman on Friday (March 6) assured the depositors that their money is safe.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," stated Sitharaman.

"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.

Shaktikanta Das, however, 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.

(With Agency Inputs)