On Thursday, the RBI said a moratorium has been imposed on Yes Bank, stressing that the bank’s financial capability has experienced a constant decline.
Vadodara| Vadodara Municipal Corporation has shifted its entire corpus of Rs 265 crore deposited with Yes Bank to Bank of Baroda five days ago, Deputy Municipal Commissioner Sudhir Patel has said.
On Thursday, the RBI said a moratorium has been imposed on Yes Bank, stressing that the bank’s financial capability has undergone a steady decline largely due to the inability of the bank to raise capital.
“Our Smart City account was in Yes Bank. As per our rule, we have an internal auditor too who gives us a report every three months. We had received a report three months back that Yes Bank is not financially well so we must go for another nationalised bank,” Mr Patel said.
On Thursday, the RBI restricted withdrawals from Yes Bank to Rs 50,000 per depositor due to the private lender’s precarious financial situation.
Sudhir Patel, chief executive officer of the SPV and deputy municipal commissioner of the VMC, said the amount had been received from the Centre as part of a grant under the Smart City Mission and deposited with a local Yes Bank branch.
It was withdrawn two days ago considering the problems faced by Yes Bank and transferred to a new account at Bank of Baroda, he informed on March 6.
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An official said Vadodara Municipal Corporation’s internal auditor had, in a report 3-month back, warned about the Bank’s financial conditions and suggested that the civic body should move its account another nationalized bank
He said two months ago, a board meeting was held where this matter was discussed with the directors.
“It was decided to move to a nationalised bank, the CEO had the power to do that. We contacted all nationalised banks and invited offers from them,” said Mr Patel.
“After discussion, it was decided to transfer the account to Bank of Baroda. One month bank we opened our account in Bank of Baroda and luckily, transferred our entire fund of Rs 265 crore into Bank of Baroda, five days back,” he added.
The Enforcement Directorate on Sunday arrested Yes Bank founder Rana Kapoor.
During the period of moratorium, the Yes Bank Ltd will not, without the permission in writing of the Reserve Bank of India, make in the aggregate, payment to a depositor of a sum exceeding ₹50,000 lying to his credit in any savings, current or any other deposit account.
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