Mumbai: Finance Minister Nirmala Sitharaman on Friday assured depositors of crisis-hit Yes Bank that their money was safe and the steps being taken were in the interest of the depositors, the bank and the economy.
Speaking to reporters, Sitharaman said: “The RBI Governor has assured me that the matter will be resolved soon. Both RBI and government are looking at this. I've personally monitored the situation for a couple of months along with RBI and we have taken the course that will be in everybody’s interest.”
The finance minister’s assurance came as the Reserve Bank of India on Thursday placed Yes Bank under a moratorium, capping deposit withdrawals at Rs 50,000 per account for a month and superseding its board.
The bank will not be able to grant or renew any loan or advance, make any investment, incur any liability or agree to disburse any payment. For the next month, Yes Bank will led by the RBI-appointed administrator Prashant Kumar, an ex-chief financial officer of SBI.
Earlier in the day, defending the timing of Yes Bank's moratorium, RBI governor Shaktikanta Das assured swift resolution to the issues concerning the beleaguered lender.
“The resolution (to Yes Bank) will be done very swiftly, it will be done very fast. 30 days which we have given is the outer limit. You will see a very swift action from RBI,” Das told reporters here.
The decision on Yes Bank was taken at a larger level, not only to deal with the problem in an individual entity, but also to maintain stability and resilience of the Indian financial and banking sector, he said.
“Let me assure you that our banking sector continues to be sound and safe," Das said, adding that RBI was ready to effectively deal with the challenge ahead. "We stand committed to maintaining stability of financial and banking sector,” he said.
On the timing of the action on Yes Bank, he said there is always debate over RBI acting prematurely or taking too long to act.
“A market-led and bank-led resolution of the problem is always preferable. You have to give time to the bank management to take step and efforts. And the bank did take efforts. When we found that we cannot wait and should not wait any longer, we decided to intervene,” he said.
“I think the timing is appropriate. I can assure you that RBI will come out with a scheme very shortly,” Das said.
Chief Economic Adviser Krishnamurthy Subramanian also assured depositors that their funds would remain safe and there was no need to panic.
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