Yes Bank customers will be able to withdraw only Rs 50,000 from their accounts till further orders by the Reserve Bank of India. The apex bank has obligated a freeze on capital-starved Yes Bank. RBI, in a notification, has said, that the financial position of Yes Bank has endured a steady decline due to the incapability to raise capital to address budding loan losses and resultant downgrades.
The bank has experienced serious governance issues and practices. RBI made all efforts to facilitate the restructuring and exploring opportunities to infuse capital to the bank which did not materialize. The board of the bank has been superseded for a period of 30 days. The decision was taken in session with the government to protect depositors' interest. The central bank also superseded the board of YES Bank, which has not been able to raise the compulsory capital for the last six months and appointed former Chief Financial Officer of SBI, Prashant Kumar as the administrator.
If the banking company desires to endure any other expenditure on account of emergency during the currency of these directions, it has to take special permission from the Reserve Bank of India. Over the past few months, YES Bank has writhed to raise capital – nearly $2 billion – it desperately needs to stay above regulatory requirements. The bank is battling bad loans due to its exposure to troubled sectors.
The bank was on Thursday placed under a moratorium by the RBI.