YES Bank revival process won't linger for a month and will be done in just a few days, top RBI sources have told BusinessToday.In. The cash-strapped lender came under the RBI radar after it placed restrictions on the cash-starved private lender due to its inability to raise funds. The apex bank has said the action was taken to "to protect the interest of the depositors and in public interest".
As part of its action plan on the bank, the RBI has capped withdrawals by depositors at Rs 50,000 for a month from March 5 until April 3. The central bank also superseded the board of YES Bank and appointed Prashant Kumar, former Deputy Managing Director and CFO of State Bank of India, as administrator. For a month, the bank can't grant or renew any loan or advance. It also can't invest or incur any liability. As part of the RBI clampdown, YES Bank also can't transfer or dispose of properties or assets.
Depositors have been assured by the RBI that their interest would be fully protected and there was no need to "panic". "The Reserve Bank 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," the apex bank said.
India's largest state-owned lender State Bank of India and largest insurer LIC have been roped in to invest in the stressed lender. The SBI board has also given the bank an "in-principle" approval to invest in YES Bank.
Meanwhile, harried Yes Bank depositors are rushing to ATMs to withdraw cash but are facing a multitude of problems including closed down machines and long queues. They have also face difficulties accessing the internet banking channel to transfer funds online.