Yes Bank Depositors’ Money Safe, Assures FM Nirmala Sitharaman

Finance Minister Nirmala Sitharaman said the Reserve Bank of India is working on an early resolution of Yes Bank Ltd. and assured its depositors that their money is safe.

Restrictions imposed on the troubled private lender and supersession of its board are steps taken in the interests of depositors, the lender and the economy, Sitharaman told reporters in New Delhi today.

The government yesterday placed the Mumbai-based lender on a moratorium, effectively putting restrictions on its functioning following an application from the central bank. The RBI superseded Yes Bank’s board and appointed an administrator. Depositors can only withdraw Rs 50,000 irrespective of the number of accounts they hold.

The RBI has acted swiftly at the right time and came up with an amicable solution for Yes Bank, Sitharaman said, adding that resolution will be found at the earliest. “The message I want to give to the investors is both the RBI and Government of India are looking at this with all details before them and not just today, I have personally monitored the situation over a couple of months with RBI.”

State Bank of India informed the exchanges yesterday that it has received in-principle approval from its board to explore an investment opportunity in Yes Bank—whose bad loan ratio rose to nearly 8 percent as of the quarter ended September. The lender—which is in dire need of capital following deterioration of its assets and provisioning for bad loans—is yet to report its earnings for the quarter ended December.

The RBI has also made a provision for bank depositors to withdraw up to Rs 5 lakh in case of an emergency, she said. The emergency, she said, covers medicine treatment, college fees, among others.

The finance minister is expected to address a press conference on the Yes Bank crisis at 4:30 PM in Delhi today.