YES Bank Board Superseded by RBI | Limits withdrawls to Rs 50,000 per account

YES Bank Board Superseded by RBI | Limits withdrawls to Rs 50,000 per account

The moratorium will be in effect till 3 April 2020
YES Bank Board Superseded by RBI | Limits withdrawls to Rs 50,000 per account
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No withdrawls above Rs 50000 without approval of RBI

Depositors dues to be adjusted before payment

A moratorium has been imposed on the capital starved YES Bank Ltd, by the countries apex banking regulator, Reserve Bank of India.  Withdrawls per account have also been capped to Rs 50,000.  This moratorium will be for a period of 30 days, till April 3, 2020.

In a late evening statement today, the RBI announced that the Bank's Board has been superseded and former SBI CFO Prashant Kumar apppointed as the administrator for YES Bank.

The RBI further pacified the depositors by saying that their interests will be protected and that there is no need to panic. The central banks notification further said that RBI, under the Banking Regulation Act, will explore and draw up a scheme in the next few days for the Bank's reconstruction or amalgamation and with the approval of the Central Government, put the same in place well before the said moratorium period of 30 days. This will ensure that the depositors are not put under hardship for a longer period of time.

As per those aware of the entire order, this moratorium is applicable only for cash withdrawls.  DD/Net Banking business will continue unaffected.

YES Bank has been grappling with mounting bad loans and this development comes six months after the RBI did the same with PMC Bank, a city based cooperative lender, after a large scam was unearthed.

Earlier during the day, the government had approved of a plan for the nation's premium lender State Bank of India to lead a consortium that will bail out YES Bank by buying a stake in the beleagured lender.

As per the proposal the Finance Ministry  and RBI came up with a capital infusion plan to the tune of Rs 12-14000 Crore in YES Bank. This will be done through a consortium led by SBI, the country's premier public sector lender.  However, since PSU Banks are themselves short of capital, the five oother banks in the consortium, will likey be ICICI, HDFC, Kotak, Axis and Indus Ind.  The capital infusion will be in tranches and through preferential allotments.

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