Before knowing about the whole situation about Yes bank you need to know about little bit about Yes Bank. It is Indian Private Sector Bank founded by Rana Kapoor and Ashok Kapur in 2004. It primary operates as Corporate Bank with Retail Banking.
How things started?
It was started a year back when Yes Bank found guilty in breaching of regulatory guidelines and confidentiality beaches. Bank was not able to raise
capital in last few years which leads to potential loan losses. The bank has faced various serious governance issues and practices. The NPA increased Rs 3,277 crore in 2018-19. Because of this issue government has appointed Mr. R Gandhi, former Deputy Governor of RBI at the Board of Yes Bank.
Bank has also represented false information with RBI in which it claims that bank is in touch with various investors which will provide funds to bank but in reality there was no such concrete proposal. Bank was also facing continuous withdrawal by customers against deposits. These are some major factors due to which Central Bank took a bold step.
What RBI did in Yes Bank?
As discussed above NPA of bank increased in last few years drastically and bank couldn’t get any fresh investment due to this consequently Bank's capital got eroded. By considering all facts RBI found that there was no credible revival plan and it is in public interest to take control of management of Bank. Reserve Bank of India superseded the board of bank and passed a moratorium order. Moratorium means the management of Bank cannot pass any kind of resolution, Yes bank share cannot appoint or remove any directors, etc. After passing order of moratorium bank has issued a press release to its customers related to dos and donts. Which can be read at banks website?
How much amount customers can withdrawal?
RBI has assured depositors that their money will be safe and cap of withdraw money will be fixed at Rs 50,000 till April 3. However on the basis of revival plan introduced by RBI may change the withdraw limit, which may increase or decrease also.
What is now?
According to the press conference help by honourable Finance Minister Mrs. Nirmala Sitharaman said that State Bank of India has shown his interest in investing in Yes Bank. According to draft plan SBI will invest and own 49 % of bank. The market value would also be revised to Rs 5,000 crore with 2,400 crore equity shares. RBI is also planning to introduce a scheme under which a security can be provided to thousands of employees of Yes Bank so that they can work under same salary and terms of employment.
Conclusion- Now eyes will be on SBI’s revival plan. What kind of solution will come up, decide about customers loss associated with Yes Bank. This article is only form information purpose, hence do not ensure authenticity. Dats mentioned in this blog is taken from various government press release and some external sources. Publishers shall not be liable for authenticity of any information contained here.