The Reserve Bank of India (RBI) has superseded the board of Yes Bank with immediate effect and capped withdrawals at Rs 50,000 per account till further orders. A moratorium has also been imposed on the capital-starved bank, the RBI said in a late evening statement. Former SBI CFO Prashant Kumar has been appointed as administrator for Yes Bank.
The latest development comes six months after the regulator did the same with the city-based cooperative lender PMC Bank after a large scam was unearthed. Yes Bank has been grappling with mounting bad loans.
Earlier in the day, public sector lender SBI along with some other financial institutions will bail out capital-starved Yes Bank, with the government giving the go-ahead, sources said on Thursday.
In a day of rapid developments, which also included a board meeting of SBI, there were reports that LIC has been asked to team up with the public sector bank for the stake buy. Together, their holding has been pegged at 49 per cent.
LIC already owns 8 per cent of the crisis-hit Yes Bank.
Significantly, a few weeks ago amid speculations of a state bailout of Yes Bank, SBI Chairman Rajnish Kumar had said the troubled bank will "not be allowed to fail".
The Mumbai-headquartered Yes Bank, once the darling of investors, has been facing difficulties ever since new chief executive Ravneet Gill took charge last March and revealed massive stress in the loan book. It had to provide against the stress and was also forced to go slow on fresh loans.
Yes Bank has been struggling to raise USD 2 billion in equity for the last few months. Many proposals came up for discussions, but none fructified.
Reports have pointed out to difficulties on the capital position at Yes Bank, speculating if it can meet the minimum thresholds by March in the absence of an infusion.
With PTI Inputs
/newsnation-english/media/agency_attachments/2024-07-23t155806234z-logo-webp.webp){kind=logo}
Follow Us/newsnation-english/media/post_attachments/images/2020/03/05/yesbankfile-28.jpg)