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

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

'This step will boost trust of citizens'

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

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

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

About Yes Bank crisis

Sitharaman said that State Bank of India (SBI) will invest 49% of equity in Yes Bank, with or investors also being invited.  On 5 March, RBI imposed a moratorium on Yes Bank, restricting withdrawals to Rs 50,000 per depositor till 3 April.  RBI superseded board of Yes Bank, which has t been able to raise required capital for last six months. It also appointed former Chief Financial Officer of SBI, Prashant Kumar as administrator of Yes Bank.

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

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(with PTI inputs)