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Puneet Dhawan of Accor is brimming with ideas on ways to revive the hospitality sector
FM Nirmala Sitharaman
Finance Minister Nirmala Sitharaman on Friday assured depositors that their money in YES Bank is safe and said the Reserve Bank of India will look into what went wrong at the private sector lender and try to fix individual responsibility.
“I had earlier said we will not allow any institution to fall off the cliff...we have been closely monitoring banking institutions and shadow banks. For the last six months, the monitoring has been almost on a daily basis,” she said at a press conference, a day after the government and the RBI set in motion a bail out for YES Bank.
Stating that the RBI has been monitoring developments at the private sector lender since 2017, she said it had noticed governance issues and there were serious concerns over the weak regulatory compliance at YES Bank, besides wrong asset classification and risky credit decisions.
“It is not that the YES Bank matter has come up yesterday or today...RBI has been closely monitoring and scrutinising YES Bank since 2017,” she said.
The Minister said the RBI advised a change in management on finding risky credit decisions. These were taken in the interest of the bank’s health and a new CEO was appointed and cleaning up of the bank started, she added.
“I have asked the RBI to assess the problem at YES Bank and clearly identify the role played by individuals in creating the problem and not addressing the problems,” Sitharaman stressed, adding that she has asked RBI to ensure that due process of law is followed with a sense of urgency.
She said the bank had been fined by the RBI on at least three occasions and was being investigated by SEBI on insider trading charges.
The Minister noted that the bank had risky corporate exposure and she listed out Anil Ambani Group, Essel, IL&FS, DHFL and Vodafone among the stressed corporates it had exposure to, some of which were from before 2014.
Retorting to former Finance Minister P Chidamabaram, Sitharaman said she has highlighted this as the Opposition has been keen to point fingers and said that “self-appointed competent doctors” had handled the collapse of United Western Bank in 2006, which was merged with IDBI Bank.
She said the government and the RBI decided to intervene after several genuine attempts by the bank to get investors did not materialise.
Stressing that the restructuring scheme for YES Bank will be completed in 30 days, Sitharaman also sought to assure depositors. “We are ensuring customers interest are protected. We can assure all depositors that their money is safe,” she said.
She further said that State Bank of India has expressed a willingness to invest YES Bank.
We will not allow any institution to fall off the cliff...we have been closely monitoring banking institutions and shadow banks.”
Puneet Dhawan of Accor is brimming with ideas on ways to revive the hospitality sector
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