New Delhi: Union Finance Minister Nirmala Sitharaman on Friday said the Reserve Bank of India has been monitoring crisis-ridden Yes Bank since 2017 and noticed governance issues, weak compliance and wrong asset classification. She said the government has asked RBI to look into what went wrong and fix individual responsibilities.
Sitharaman's comments came a day after the RBI put Yes Bank under a moratorium and capped withdrawals at Rs 50,000 until April 3. She said the Anil Ambani Group, Essel, ILFS, DHFL and Vodafone were among the stressed corporates to which the Yes Bank had exposure.
In the RBI's 'Scheme of Reconstruction' for the crisis-ridden bank unveiled earlier in the day, it said the Yes Bank's capital stands altered at Rs 5,000 crore and a strategic investor bank will bring in 49% equity. However, the RBI said the strategic investor bank cannot reduce its holding in Yes Bank below 26% before three years.
The RBI has said that the State Bank of India (SBI) has expressed willingness to invest in Yes Bank, as per Sitharaman. "The RBI sought change in Yes Bank management after finding risky credit decision," 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, said Sitharaman, adding that on finding risky credit decisions, the RBI advised change in management.
These decisions were taken in the interest of the bank's health and a new CEO was appointed in September 2018 and cleaning up of bank started, she said, adding that investigative agencies had also found irregularities. She said the RBI has been asked to assess the causes of problems and identify the role played by individuals.
The government, she said, wants the RBI to ensure that due process of law is followed with a sense of urgency.
The restructuring scheme will be fully effective within 30 days, said Sitharaman, adding that SBI has expressed willingness to invest in the bank. The finance minister also said that employment and salary of Yes Bank employees has been assured for one year.
(With inputs from PTI)
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