(RBI) appointed Prashant Kumar, a former deputy managing director and chief financial Officer of State Bank of India (SBI), as administrator for
It said in exceptional circumstances like medical emergencies, marriages, depositors can withdraw up to Rs five lakh or amount in their accounts, whichever is less.
A RBI statement said a scheme to reconstruct or amalgamate the bank will be drawn well before the 30-day period of moratorium ends and depositors needn't "panic".
Yes Bank's has undergone a steady decline largely due to inability of the bank to raise capital to address potential loan losses and resultant downgrades.
"The financial position of Yes Bank
Ltd. (the bank) has undergone a steady decline largely due to inability of the bank to raise capital to address potential loan losses and resultant downgrades, triggering invocation of bond covenants by investors, and withdrawal of deposits. The bank has also experienced serious governance issues and practices in the recent years which have led to steady decline of the bank," said the RBI.
Yes Bank has been grappling with mounting bad loans. Media reports said earlier on Thursday SBI along with some other financial institutions would bail out Yes Bank, with the government giving the go-ahead.
The plan would throw a lifeline to Yes Bank which has been struggling to raise capital since the middle of last year, as it has faced a surge in bad loans due to the nation’s shadow banking crisis. Moody’s Investors Service cut the bank’s credit ratings in December and in January said its “standalone viability is getting increasingly challenged by its slowness in raising new capital.”