'Will boost trust': Amit Shah thanks PM Modi for approving Yes Bank reconstruction plan

After the government gave its approval to the reconstruction scheme drawn by the Reserve Bank of India's (RBI) for Yes Bank on Friday, Union Home Minister Amit Shah thanked Prime Minister Narendra Modi for approving the reconstruction plan. Taking to Twitter, Shah wrote that this step will boost the trust of citizens, who have reposed faith in formal banking, safeguard their hard-earned money.

'This step will boost the trust of citizens'

He added that it will also provide much needed financial stability to the Bank.

In another tweet, Shah wrote that the Modi cabinet has taken several decisions on Friday, which re-emphasise its commitment towards the welfare of common people & farmers. "The 4% hike in DA, will benefit more than 1.13 crore people and the increase in MSP of Copra will help farmers get a better price for their produce," he said. 

Speaking to reporters in Delhi on Friday, Finance Minister Nirmala Sitharaman said that within three days after the notification of the reconstruction scheme, the moratorium on Yes Bank will be lifted. "In the next seven days after the reconstruction scheme's notification, a new board will be constituted at Yes Bank and at least two directors of State Bank of India will be part of the new board," said the Finance Minister.

About the Yes Bank crisis

Sitharaman said that State Bank of India (SBI) will invest 49% of the equity in Yes Bank, with other investors also being invited.  On 5 March, the RBI imposed a moratorium on Yes Bank, restricting withdrawals to Rs 50,000 per depositor till 3 April. The RBI superseded the board of Yes Bank, which has not been able to raise the required capital for the last six months. It also appointed former Chief Financial Officer of SBI, Prashant Kumar as the administrator of Yes Bank.

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Later, Sitharaman had said the government asked the RBI to look into what went wrong at Yes Bank and fix individual responsibilities. On Thursday, SBI announced a Rs 7,250-crore fund infusion into the crippled Yes Bank under which it will pick up to 49% equity in the fourth largest private sector lender. The fund infusion is part of the Reserve Bank-mandated rescue plan.

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(with PTI inputs)