On March 5, the Reserve Bank of India announced that the board of private sector lender Yes Bank is being superseded with immediate effect.
“The Reserve Bank assures the depositors of the bank that their interests will be fully protected and there is no need to panic,” stated RBI.
Former CFO of State Bank of India, Prashant Kumar has been appointed as the administrator.
Restrictions have been imposed upon withdrawals and maximum withdrawal limit has been fixed at Rs 50000 per month. The limit remains the same even on having multiple accounts. In case of emergency like medical or marriage expenses, RBI will relax the withdrawal limit to Rs 5 lakhs.
Pay orders and drafts issued till now would be paid in full.
“The financial position of Yes Bank Ltd has undergone a steady decline largely due to 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,” said the RBI. “