BIG: SBI Boss Rajnish Kumar Confirms In-principle Approval For Yes Bank Bailout Investment

Economy

On Friday, SBI Chairman Rajnish Kumar confirmed that an in-principle approval of investing in Yes Bank had already been communicated to the stock exchange.

Written By Akhil Oka | Mumbai | Updated On:

Speaking to the media on Friday, SBI Chairman Rajnish Kumar confirmed that an in-principle approval of investing in Yes Bank had already been communicated to the stock exchange. Asserting that there was no need for the customers to panic, he said the interest of all stakeholders would be protected. Maintaining that the RBI was taking appropriate steps for financial stability, he refused to reveal further details of the SBI’s plan vis-à-vis Yes Bank.  

Read: 'Scheme To Revive Yes Bank Soon; 30 Days Outer Limit For RBI Moratorium': Shaktikanta Das

The SBI Chairman said, “Earlier, RBI Governor has very clearly said that there is no need for panic. The interest of all stakeholders particularly all the customers will be protected. So, what else do you want? We have given the information of in-principle approval of SBI investment to the stock exchange yesterday night. I will tell you when the time arises. RBI said that they will come out with a restructuring plan. So, let that come, then we will talk.” 

He added, “RBI will keep on taking steps for financial stability. There is an in-principal approval of SBI seeking to buy a stake in Yes Bank. You will have to wait for the details.” 

Read: RBI Supercedes Yes Bank's Board With Immediate Effect; Appoints Ex-CFO As Administrator

Yes Bank crisis

On Thursday, the RBI imposed a moratorium on Yes Bank, superseding its Board of Directors. In the meantime, former Chief Financial Officer of SBI Prashant Kumar has been appointed as the administrator for Yes Bank. The withdrawals for customers have been capped at Rs.50,000.

However, an exception can be made on the grounds of a medical emergency, higher education costs, marriage expenses, and unavoidable emergency. The RBI not only assured the customers but also promised to draw a scheme for the bank’s reconstruction or amalgamation within the 30-day moratorium period. The RBI has cited Yes Bank's “inability to raise capital to address potential loan losses” and “serious governance issues” as some of the reasons for taking action.  

Read: SBI-led Consortium To Buy Controlling Stake In Yes Bank, Announcement Likely Soon: Sources

Talking at an event in Mumbai earlier in the day, RBI Governor Shaktikanta Das remarked, "The decision has been taken at a larger level - not just at an individual entity level. It is at a larger level to ensure the resilience of the Indian banking sector. Let me assure you that the Indian banking sector continues to be safe and sound and challenges ahead of us – RBI is ready to deal with it effectively, as it is the responsibility of RBI as the Central Bank of India."

Read: CEA K Subramanian Backs RBI's Moratorium On Yes Bank; Cites 'standard Procedure Globally'

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