BIG: Yes Bank Resumes All Banking Services As RBI Lifts Moratorium After Two Weeks

India Business

Nearly two weeks after the Reserve Bank of India imposed a moratorium on Yes Bank, its full banking services became operational on Wednesday from 6 pm.

Written By Akhil Oka | Mumbai | Updated On:
Yes Bank

Nearly two weeks after the RBI imposed a moratorium on Yes Bank, its full banking services became operational on Wednesday from 6 pm. In a tweet, Yes Bank confirmed the development. It thanked the customers for their patience and cooperation. Earlier on Tuesday, Prashant Kumar- the current administrator of Yes Bank revealed that only one-third of the customers withdrew Rs.50,000 during the moratorium period, indicating their faith in the bank. Additionally, he stated that the bank had witnessed higher inflows than outflows in the last few days. 

Read: 'More Cash Inflow Than Withdrawals,' Says Yes Bank To Depositors; SBI To Raise Stake Soon

The moratorium imposed on Yes Bank

On March 5, the RBI imposed a moratorium on Yes Bank, superseding its Board of Directors. In the meantime, former Chief Financial Officer of SBI Prashant Kumar was appointed as its administrator. The RBI cited Yes Bank's “inability to raise capital to address potential loan losses” and “serious governance issues” as some of the reasons for taking action. 

A day later, the RBI unveiled a draft reconstruction scheme of Yes Bank in the public domain. As per the scheme, State Bank of India expressed its willingness to invest in Yes Bank and participate in the reconstruction process. Moreover, the RBI invited suggestions and comments from the members of the public. Under the ‘Yes Bank Ltd. Reconstruction Scheme, 2020’, it was stated that the investor bank shall hold 49% shareholding in the reconstructed bank. Moreover, it cannot reduce its holding below 26% before the completion of three years of infusion of the capital. 

Read: Cabinet Approves Yes Bank Reconstruction Scheme; Moratorium To End 3 Days Post-notifying

Union Cabinet approves Yes Bank reconstruction scheme

On March 13, the Union Cabinet approved the reconstruction scheme of Yes Bank as proposed by RBI. Speaking to the media on this occasion, Finance Minister Nirmala Sitharaman observed that the moratorium placed on Yes Bank will be lifted within three days of the notification of the reconstruction scheme. The SBI has declared that it would purchase 725 crore shares of Yes Bank at Rs. 10 per share subject to regulatory approvals. As per reports, other lenders including ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank and individuals like Radhakrishna Damani, Rakesh Jhunjhunwala and Azim Premji Trust have joined SBI in investing in Yes Bank.  

Read: RBI Guv States 'Yes Bank Reconstruction Scheme Sustainable'; Hails Pvt-public Partnership

Read: Yes Bank Investment Meant To Ensure System's Stability, Not RoI: SBI Chief's Big Admission

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