RBI caps withdrawals from Yes Bank at Rs50,000

Supersedes board; former SBI CFO Prashant Kumar appointed administrator

MUMBAI: The problems that started brewing at Yes Bank about two years ago have now culminated with RBI superseding its board and capping withdrawals from accounts at Rs50,000.

Even as reports on Yes Bank holding talks with different strategic groups for raising capital making headlines, the Reserve Bank on Thursday imposed a moratorium on the embattled Yes Bank and imposed the withdrawal ceiling.

In another major move, the bank’s board has been superseded with immediate effect. The RBI also assured the depositors of the bank that their interest will be fully protected and there was no need to panic.

Former SBI CFO Prashant Kumar has been appointed as administrator for Yes Bank.

However, Yes Bank will be able to pay salaries to the bank’s over 20,000 employees, the RBI has clarified.

It was about six months ago, RBI in a similar move had announced moratorium on the Pune-based cooperative bank, PMC Bank after news of a scam rattled the financial services industry.

Yes Bank has been reeling under bad loans and has been battered by issues right from its founding promoters leaving the bank and bank being left with a depleted capital base.

Though several rounds of discussions took place with different prospective investors in the past couple of months, a concrete decision has been slipping.

On Thursday, there were reports appearing in a section of media stating that SBI along with some other financial institutions would bail out Yes Bank, with the government giving the go-ahead. The bank is yet to give a clarification to Sebi on a query raised on this report.

 

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