The government has imposed a withdrawal limit of 50,000 rupees for depositors of beleaguered private lender Yes Bank for one month. An official notification issued by the finance ministry said that the cap will stay in effect till 3rd of April. The limit on withdrawal comes with a few exemptions, in cases like medical emergency, higher education, marriage and unavoidable emergency.
In a separate release, Reserve Bank of India said that Yes Bank’s board has been superseded for a period of 30 days owing to serious deterioration in the financial position of the private lender. Former Chief Financial Officer of SBI Prashant Kumar has been appointed as administrator for Yes Bank.
RBI has assured depositors of Yes Bank that that their interest will be fully protected and there is no need to panic. In terms of the provisions of the Banking Regulation Act, the Reserve Bank will explore and draw up a scheme in the next few days for the bank’s reconstruction or amalgamation.
In another development, SBI Board has given the State Bank of India in-principle approval to invest in the capital-starved Yes Bank. The announcement came hours after Yes Bank was placed under a moratorium.