New Delhi: Assuring account holders and investors that the government will guard their interests, finance minister Nirmala Sitharaman explained that the crisis that has befallen in front of Yes Bank is not out of the blue. The bank was on the radar of the Reserve Bank of India since 2017 because of its various irregularities. Also Read - Here is How RBI is Planning to Restructure Beleaguered Yes Bank
Here are 10 things that the finance minister said Also Read - Yes Bank Crisis: List of Exemptions Under Which Withdrawal More Than Rs 50,000 Allowed
1. Management issue/Culture of weak compliance Also Read - Yes Bank Moratorium Hits PhonePe, BharatPe Services, UPI Transactions Suffer Outage
The Reserve Bank of India has been monitoring the activities of Yes Bank since 2017. Governance issues, weak compliance, wrong asset clarification were noticed.
2. RBI wanted change in management
Since 2004, the bank was under the same management. RBI sought a change in the management after finding risky credit decision.
3. Plan to Revive Yes Bank Failed
Genuine attempts were taken to get equity into Yes Bank. But that did not materialise.
4. Plan B Ready
The RBI has plan B to restructure Yes Bank. It will be executed within the moratorium period
5. SBI to Invest
SBI will buy at least 49 per cent stake in Yes Bank and will take part in the restructuring process.
6. RBI will Probe
RBI has been asked to identify individual roles behind what went wrong.
7. Deposits, liabilities not to be affected
Deposits, liabilities won’t be affected, though there is a cap now. Employment and salary are assured for at least one year.
8. Lent Money to Stressed Corporations
Yes Bank lent money to some of the very stressed corporations like Anil Ambani Group, Essel, Dewan Housing Finance Corporation, Infrastructure Leasing and Financial Services Limited and Vodafone
9. Top-Level corruption
Investigating agencies found irregularities in the top level
10. Not to blame legacy but…
“Don’t want to take names but the self-appointed doctors of the economy who are saying ‘no bank’ can’t forget about the collapse of the United Western Bank which was forcefully merged with IDBI. Same with Global Trust Bank which was merged with the Oriental Bank of Commerce,” Sitharaman said.