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Yes bank Crisis: Reason Behind Yes Bank Crisis, everything you need to know

The process of resolving the crisis faced by Yes Bank, which is facing capital shortage, has been accelerated. While the stock market took a dive, the Finance Minister came forward on Friday and held a press conference saying that people’s money is completely safe and the Reserve Bank is working on a solution to this problem as soon as possible. Now the question is what is the reason behind the crisis over the bank.

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These companies are the reason for the crisis

The finance minister has said that people should not let the money sink. But the companies to which Yes Bank gave loans either drowned or became distressed. In such a situation, there was a cloud of crisis on the bank due to the loan withdrawal stopped.

The companies behind the crisis are Cafe Coffee Day, Jet Airways, Vodafone, Anil Ambani Group, Essel, DHFL, ILFS, among others. Yes Bank was given a loan to all of them. Some of these companies have completely sunk and some are in trouble.
For example, Jet Airways has sunk last year. Vodafone, a telecom service provider in association with Idea Group, was in the discussion over AGR payment recently. In this case, the Supreme Court had expressed a lot of resentment and instructed to make payment by 12 o’clock at night.
Explain that at that time Vodafone Idea was said to be owed Rs 53,000 crore. Jet Airways had crashed flights. Cafe Coffee Day is also a debtor of Yes Bank and its owner VG Siddharth committed suicide last year.

Currently the job of bank employees is safe

Finance Minister Nirmala Sitharaman also said that the jobs and salary of Yes Bank employees will be safe for one year. At the same time, RBI Governor Shaktikanta Das said that the solution of the bank stuck in the crisis will be found as soon as possible. The 30-day limit fixed for this is the maximum.

Yes Bank was fined one crore

Nirmala Sitharaman said, it is not that the issue of Yes Bank has been raised. Since 2017, RBI was monitoring YES Bank. In 2018, the central bank identified the mess in Yes Bank, while in 2019, Yes Bank was also fined one crore rupees. He said, State Bank of India has shown interest in Yes Bank.

Loans given to companies whose condition is poor before 2014

Finance Minister Nirmala Sitharaman also stated in the press conference that the rules were not being followed by Yes Bank. The bank took risky credit decisions. I have said before that we will not allow any institution to sink. Prior to 2014, loans were given by Yes Bank to companies whose financial condition was not good.

Yes Bank has given loans to companies like Anil Ambani, Essel Group, Infrastructure Leasing & Financial Services Limited (ILFS), Dewan Housing Finance Corporation Limited (DHFL) and Vodafone which have defaulted.

Those responsible will be identified

She said, I have asked RBI to find out the reason of this bank crisis. Also asked to identify the people personally responsible for the problem. On the cash crisis, she said, she will talk to the RBI that the depositors of Yes Bank do not have to face the problem of cash.
5 lakh rupees will be safe if the bank dips

Now, in case of a bank sinking, the account holder gets a guarantee of up to Rs 5 lakh. The government took this important decision in the recent budget, 2020-21, in view of the cases of troubled banks. This means that up to 5 lakh rupees in the bank will be absolutely safe. The government has recently increased the insurance cover from Rs 1 lakh to Rs 5 lakh for those depositing money in banks. Before the budget this limit was Rs 1 lakh.

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