News Nation Logo

Yes Bank Rescue Plan Notified By Govt, Reserve Bank Of India's Moratorium On Withdrawals To Be Lifted On March 18

For The Hassled Customers, Who Have Been Queuing Outside ATMs And Bank Branches To Withdraw Their Money, There Will Be No Ban On Cash Withdrawals From Wednesday.

News Nation Bureau | Edited By : Surabhi Pandey | Updated on: 14 Mar 2020, 10:13:41 AM
Yes Bank file photo

On March 5, the RBI imposed a moratorium on Yes Bank, restricting withdrawals to Rs 50,000 per depositor till April 3. (Photo Credit: File Photo)

New Delhi:

In a massive relief for the Yes Bank depositors and the investors, the rescue plan for the embattled bank has been notified by the Union Finance Ministry. In simple terms, this means that the moratorium or ban imposed by the Reserve Bank of India on the cash withdrawals will be lifted within three working days. For the hassled customers, who have been queuing outside ATMs and bank branches to withdraw their money, there will be no ban from Wednesday. Those heavily dependent on digital payments will also heave a sigh of relief. Since the moratorium meant no e-transactions via Yes Bank accounts. According to the 'Yes Bank Ltd Reconstruction Scheme, 2020', a new board, having at least 2 directors of the State Bank of India, will take over within seven days of the issuance of notification.

On Friday, giving out the details of the rescue plan, Union Finance Minister Nirmala Sitharaman said the Union Cabinet has approved the reconstruction scheme for Yes Bank as suggested by the Reserve Bank. On Thursday, the SBI said it will invest Rs 7,250 crore in Yes Bank, which is much higher than Rs 2,450 crore it had planned initially for 49 per cent stake in the private sector lender that began operations in 2004.

On March 5, the RBI imposed a moratorium on Yes Bank, restricting withdrawals to Rs 50,000 per depositor till April 3. The RBI also superseded the board and placed it under an administrator, Prashant Kumar, former deputy managing director and CFO of SBI.

Giving details about the scheme, Sitharaman said SBI will invest for 49 per cent equity in Yes Bank and other investors are also being invited.

Total assets of Yes Bank Ltd stood at Rs 3,46,576 crore as end of September 2019. The bank posted a net loss of Rs 486 crore for the first half ended September of the current fiscal year on a total income of Rs 17,421 crore. Yes Bank will on Saturday (March 14) announce its third quarter results, which was delayed amid the bank's capital raising plans.

Founded by Rana Kapoor and Ashok Kapur in 2004, Yes Bank was conceived as ‘Full Service Commercial Bank’. Over the years, the bank became darling of both the corporate and retail customers. In 2015, it was honoured with ‘Bank of the Year’, India award in London. Same year, it was recognised as ‘strongest bank in India’. It became the only Indian bank to be included in the prestigious Dow Jones Sustainability Index. In 2013, Moody’s awarded grade rating of BAA3. It was also regarded as ‘best employee’ in 2013. With such awards and accolades, Yes Bank was on a dream run. The bank saw exponential growth in terms of both capital and trust in the market.

(With agency inputs)

For all the Latest Business News, Download News Nation Android and iOS Mobile Apps.

First Published : 14 Mar 2020, 08:25:29 AM