Yes Bank lent money to stressed firms like Essel, DHFL: Sitharaman

Finance Minister Nirmala Sitharaman on Friday (March 6) said the Reserve Bank of India has been monitoring the crisis-hit Yes Bank since 2017, and found there were governance issues and weak compliance in the bank.

“RBI sought change in Yes Bank management after finding risky credit decision,” said the finance minister. “Attempts to get equity into Yes Bank did not materialise,” she said while addressing a press conference on Friday.

She said the bank had lent money to some of the “very stressed corporations like Anil Ambani Group, Essel, Dewan Housing Finance Corporation (DHFL), Infrastructure Leasing & Financial Services Limited (IL&FS), and Vodafone.”

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“Since 2017, RBI has been continuously monitoring and scrutinising Yes Bank. It noticed that there were governance issues and weak compliance in the bank. There was a wrong asset classification together with risky credit decisions,” she added.

Sitharaman asserted the bank’s deposits and liabilities will not be affected and also assured salaries and employment for at least one year. She said she has asked the RBI to assess what went wrong with the private lender and identify the role played by individuals.

“Our government is committed to ensuring that depositors’ interests are safeguarded. I want RBI to ensure that due process of law is set to roll with a sense of urgency so that we should find out as to who led to the problem of this size and magnitude,” she said.

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