The Reserve Bank of India (RBI) appointed former SBI CFO Prashant Kumar as administrator for Yes Bank on Thursday, as per a statement released by the body. The RBI has also imposed a moratorium on the troubled lender capping its withdrawals at Rs 50,000. The RBI also stated that there was no need to 'panic' as the depositors' interest will be 'fully protected'.
"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," read the press release by RBI
Yes Bank Ltd. placed under Moratoriumhttps://t.co/GcAFiDs6CU— ReserveBankOfIndia (@RBI) March 5, 2020
Earlier in the day, sources reported that a consortium of lenders, led by State Bank of India, will acquire a controlling stake in Yes Bank. It was also stated that the government had given a go-ahead to this plan. The bank's capital buffers have come down due to non-performing assets. Yes Bank, which is grappling with bad loans, is looking to raise fresh capital but the plans are facing uncertainties.
Yes Bank has been passing through a tumultuous period ever since the Reserve Bank, in August 2018, asked the then chief executive Rana Kapoor to leave by January 31, 2019, amid concerns on governance and loan practices.