The interests of Yes Bank depositors will be protected and the Reserve Bank of India (RBI) will soon put in place a mechanism to revive the capital-starved public sector lender, the government said on Friday.
Chief Economic Advisor Krishnamurthy Subramanian said that there is no need for depositors to panic.
"I want to assure all depositors that their funds will remain safe, and there is no need to panic," he told reporters in New Delhi.
Meanwhile, RBI Governor Shaktikanta Das said that there will be a swift action from the central bank to put in place a scheme to revive Yes Bank.
"The 30 days which we have given is the outer limit. You will see very swift action from the RBI to put in place a scheme to revive. A market-based resolution of the problem, a bank-laid, investor- laid resolution of the problem is always preferable," he said.
"You have to give time to the bank and management to take the steps. The RBI intervened when we found it was not working out," Das said.
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Their statements came as Yes Bank stock plunged by 57.3 per cent intra-day to Rs 15.70 apiece.
The move by RBI comes nearly six months after it did the same with Mumbai-based Punjab and Maharashtra Cooperative (PMC) Bank.
On Thursday, the RBI said a moratorium has been imposed on Yes Bank, stressing that the bank's financial capability has undergone a steady decline largely due to inability of the bank to raise capital.
During the period of moratorium, the Yes Bank Ltd will not, without the permission in writing of the Reserve Bank of India, make in the aggregate, payment to a depositor of a sum exceeding Rs 50,000 lying to his credit in any savings, current or any other deposit account.
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