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Finance Minister Nirmala Sitharaman on Yes Bank fiasco: ‘RBI to assign responsibilities’

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Finance Minister Nirmala Sitharaman on Friday said the government has asked the Reserve Bank of India to look into wrongs at the Yes Bank and assign individual responsibilities.

The bank was being under watch since 2017 and developments relating to it were being monitored on a day-to-day basis, she said. “Since 2017, the central bank noticed governance issues and weak regulatory compliance at Yes Bank, besides wrong asset classification and risky credit decisions.”

The bank took many risky credit decisions, and the RBI had advised change in management, the Minister said adding such decisions were taken in the interest of the bank’s health. A new CEO was appointed in September 2018 and cleaning up of bank started and the investigative agencies too found irregularities, she said.

Sitharaman said the RBI has been asked to assess the causes of problems and identify the role played by individuals.

The restructuring scheme will be fully effective within 30 days, she said adding that the 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 that Essel, ILFS, DHFL and Vodafone were among the stressed corporates that Yes Bank had exposure to.

Hitting out at former Finance Minister P. Chidambaram, Sitharaman said that the United Western Bank collapsed in 2006 under the “self-appointed competent doctors”.

“We are ensuring customers’ interests are protected. We can assure all depositors that their money is safe,” she said.

“I am closely monitoring every institution,” she added.

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