Yes Bank Crashes, RBI Steps In, FM Assures Depositors

After restrictions by Reserve Bank of India (RBI) on Yes Bank created panic situation among its customers, Finance Minister Nirmala Sitharaman on Friday assured that money of every depositor is safe.

She asserted that the steps have been taken in the interest of depositors, bank and the economy.

“I am in continuous interaction with RBI. RBI has assured that they will find a quick resolution. I want to also assure every depositor that their money shall be safe. Steps that are taken now are in the interest of depositors, bank and the economy. There are doubts among depositors but I assure their money is safe,” Sitharaman told reporters here.

“Reserve Bank has taken cognizance of the matter. RBI has gone over and over again to find out an amicable resolution and that has been over the past couple of months. So, it’s not as if it comes suddenly now. RBI Governor has assured me that the matter will be resolved soon,” she said.

The minister continued: “We have been monitoring the situation. Now, RBI has come up with a plan and a resolution will be found at the earliest. I along with RBI was monitoring the situation in the past couple of months and therefore we have a course which is in everybody’s interest.”

Earlier, Chief Economic Advisor Krishnamurthy Subramanian said that there is no need for depositors to panic and assured all depositors’ funds will remain safe.

RBI Governor Shaktikanta Das said that there will be a swift action from the central bank to put in place a scheme to revive Yes Bank.

“The 30 days which we have given is the outer limit. You will see very swift action from the RBI to put in place a scheme to revive. A market-based resolution of the problem, a bank-laid, investor- laid resolution of the problem is always preferable,” he said.

“You have to give time to the bank and management to take the steps. The RBI intervened when we found it was not working out,” Das said.

Yes Bank stocks plunged by 57.3 per cent intra-day to Rs 15.70 apiece today.

The move by RBI comes nearly six months after it did the same with Mumbai-based Punjab and Maharashtra Cooperative (PMC) Bank.

On Thursday, the RBI said a moratorium has been imposed on Yes Bank, stressing that the bank’s financial capability has undergone a steady decline largely due to the inability of the bank to raise capital.

During the period of moratorium, the Yes Bank Ltd will not, without the permission in writing of the Reserve Bank of India, make in the aggregate, payment to a depositor of a sum exceeding Rs 50,000 lying to his credit in any savings, current or any other deposit account.

(ANI)