RBI has in consultation with the Central Govt, superseded the Board of Directors of Yes Bank Ltd for a period of 30 days.
Mumbai| The Reserve Bank of India has imposed moratorium (temporary restriction) on Yes Bank. According to PTI, sources say that the withdrawal limit has been capped at 50,000 rupees.
RBI imposes moratorium on Yes Bank; caps withdrawals at Rs 50,000: Sources
— Press Trust of India (@PTI_News) March 5, 2020
RBI has in consultation with the Central Govt, superseded the Board of Directors of Yes Bank Ltd for a period of 30 days owing to a serious deterioration in the financial position of Bank. Prashant Kumar, ex-DMD & CFO of SBI appointed as the administrator.
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The RBI in its notice said, “The financial position of Yes Bank Ltd. (the bank) has undergone a steady decline largely due to the inability of the bank to raise capital to address potential loan losses and resultant downgrades, triggering invocation of bond covenants by investors, and withdrawal of deposits. The bank has also experienced serious governance issues and practices in recent years which have led to a steady decline of the bank.”
Reserve Bank of India: RBI has in consultation with the Central Govt, superseded the Board of Directors of Yes Bank Ltd for a period of 30 days owing to a serious deterioration in the financial position of Bank. Prashant Kumar, ex-DMD & CFO of SBI appointed as the administrator. https://t.co/bBmn5KeekB
— ANI (@ANI) March 5, 2020
“After taking into considering these developments, the Reserve Bank came to the conclusion that in the absence of a credible revival plan, and in public interest and the interest of the bank’s depositors, it had no alternative but to apply to the Central Government for imposing a moratorium under section 45 of the Banking Regulation Act, 1949. Accordingly, the Central Government has imposed moratorium effective from today,” the notice read.
However, the reserve bank has also assured that it 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. It has said that it will bring the changes before the period of a moratorium of thirty days ends so that the depositors are not put to hardship for a long period of time.
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