Soon after the Reserve Bank of India (RBI) imposed a 30-day moratorium on Yes Bank, scores of people in Ahmedabad and Bhubaneshwar on Saturday queued up outside Yes Bank branches to withdraw cash.
RBI has set the withdrawal limit to Rs 50,000 till April 3. Expressing his hardship, a resident of Ahmedabad said that he has no cash left in hand as he had parked all his money in Yes Bank. He further said that the customers are facing a lot of trouble.
A female customer of the Yes bank from Bhubaneshwar requested the company to increase the limit for online transactions, so they do not face a cash crunch.
"Even if they allow us to do digital transactions and increase the limit, half of our problems will be resolved. I do not know what to do. The government must do something regarding this."
On Thursday, the RBI imposed a moratorium on Yes Bank, stressing that the bank's financial capability has undergone a steady decline largely due to the inability of the bank to raise capital.
RBI superseded its Board of Directors and appointed former Chief Financial Officer of SBI Prashant Kumar as its administrator for the meantime.
The withdrawals for customers have been capped at Rs. 50,000. However, an exception can be made on the grounds of a medical emergency, higher education costs, marriage expenses, and unavoidable emergency.
The RBI has 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. The RBI on Friday unveiled a draft reconstruction scheme of Yes Bank in the public domain. Moreover, the RBI has invited suggestions and comments from the members of the public until March 9, 2020.
The bank will not be able to grant or renew any loan or advance, make any investment, incur any liability or agree to disburse any payment. The apex bank has assured customers that their interest will be fully protected and they do not need to panic.
The decision comes hours after it was reported that the Finance Ministry had approved State Bank of India (SBI) to explore investment opportunities in the private bank. The Yes Bank has been struggling to raise funds, with bad loans increasing.
(With inputs from ANI)