Yes Bank was placed under a "moratorium" on late Thursday (5 March 2020), with the Reserve Bank of India (RBI) capping depositor withdrawals at Rs 50,000 per account for a month and superseding the board with immediate effect.
"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," RBI said in a statement.
RBI assured the depositors of the bank that their interest will be fully protected and there is no need to panic. RBI said it will explore and draw up a scheme in the next few days for the bank's reconstruction or amalgamation and with the approval of the central government, put the same in place well before the period of moratorium of thirty days ends so that the depositors are not put to hardship for a long period of time, it added.
The board of Yes Bank has also been superseded with immediate effect, RBI said in a late evening statement. It also appointed former chief financial officer (CFO) of SBI, Prashant Kumar as the administrator of Yes Bank.
"In exercise of the powers conferred under 36ACA of the Banking Regulation Act 1949, RBI has, in consultation with Central Government, superseded the board of directors of Yes Bank for a period of 30 days owing to serious deterioration in the financial position of the bank. This has been done to quickly restore depositors' confidence in the bank, including by putting in place a scheme for reconstruction or amalgamation. Prashant Kumar, ex-DMD and CFO of State Bank of India has been appointed as the administrator under Section 36ACA (2) of the Act."
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