Yes Bank has announced that customers can now withdraw cash using their Yes Bank Debit cards both at Yes Bank and other bank ATMs. Yes Bank took to its official Twitter handle to share the information with its customers, a day after the Reserve Bank of India superseded its board and imposed a withdrawal limit of Rs 50,000. The latest development will bring relief to customers after depositors complained that the bank had not informed them about the capping of withdrawal limit.
The Reserve Bank of India on March 5 issued a press release where it stated, "The financial position of Yes Bank Ltd. (the bank) has undergone a steady decline largely due to the inability of the bank to raise capital to address potential loan losses and resultant downgrades, triggering the invocation of bond covenants by investors, and withdrawal of deposits. The bank has also experienced serious governance issues and practices in recent years which have led to a steady decline of the bank."
As per reports, Yes Bank had lent money to many companies that had turned into a Non-Performing Asset (NPA) and the list included some big names of Indian financial services sector like, IL&FS, Dewan Housing, Jet Airways, Cox & Kings, CG Power, Cafe Coffee Day, Altico.
The press release from March 5 further stated, "After taking into consideration these developments, 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. Accordingly, the Central Government has imposed moratorium effective from today."
However, the RBI had assured the depositors that the depositors interest will be fully protected and there is no need to panic. The Reserve Bank of India on March 6 had placed in public domain a draft scheme of reconstruction of the Yes Bank Ltd. As per RBI, the State Bank of India has expressed its willingness to make an investment in Yes Bank Ltd. and participate in its reconstruction scheme.
Lead Image Credit: PTI