State Bank of India (SBI) chairman Rajnish Kumar on Friday, March 6, met Finance Minister Nirmala Sitharaman in Parliament to discuss the Yes Bank crisis. Following the meeting, the SBI chairman assured the depositors that the interest of Yes Bank depositors will be protected and there is no need to panic.
"Will take a call on Yes Bank after the Reserve Bank of India (RBI) plan is in," Rajnish Kumar told reporters outside the Indian Parliament.
"We have shown an in-principle interest in Yes Bank and the proposal for the same has been sent to the stock exchange," Kumar stated.
After SBI chief, SEBI chairman will also meet Nirmala Sitharaman today.
Money is safe: RBI, SBI assure depositors
Both the RBI and the SBI have assured Yes Bank depositors that their money is safe and there is no need to panic. SBI Chairman Rajnish Kumar said, "We have intimated the in-principle approval of intent to invest in yes bank to exchanges."
Yes Bank was placed under 30-day moratorium by the RBI and the withdrawal limit has been capped at Rs 50,000 for depositors on March 5. The bank will remain under withdrawal restrictions until April 3 next month.
However, the cap on withdrawals will have a few exemptions and depositors can withdraw money more than the set limit in cases like medical emergency, higher education, marriage and unavoidable emergency. The order of moratorium was issued on recommendations by the Reserve Bank of India (RBI).
READ: Yes Bank shares plunge over 70% after RBI caps withdrawals
RBI on Yes Bank moratorium
The RBI informed that a steady decline in the capital-starved bank's financial position was mainly due to its inability and that "it had no other alternative" but to issue an application asking the centre to take action against the bank.
"The financial position of Yes Bank Ltd. has undergone a steady decline largely due to inability of the bank to raise capital to address potential loan losses and resultant downgrades, triggering invocation of bond covenants by investors, and withdrawal of deposits. The bank has also experienced serious governance issues and practices in the recent years which have led to steady decline of the bank," the release noted.
