New Delhi: In a major development, the Reserve Bank of India on Thursday evening imposed a moratorium on the crisis-ridden Yes Bank and capped withdrawal limit at Rs 50,000 per account till further orders. Also Read - Yes Bank "Sound and Stable", CEO Ravneet Gill Reassures Investors After Shares Slide
Issuing a statement, the RBI said that it has in consultation with the Central government has superseded the Board of Directors of Yes Bank Ltd for a period of 30 days owing to a serious deterioration in the financial position of Bank. Also Read - Sensex Snaps 6-Session Falling Streak; Yes Bank Soars 10 Per Cent
Meanwhile, the RBI has appointed Prashant Kumar, ex-DMD & CFO of SBI, as the administrator.
The strong move from the RBI comes six months after the regulator did the same with the city-based cooperative lender PMC Bank after a large scam came to limelight.
The Yes Bank faced action from the RBI as it has been grappling with mounting bad loans. Earlier in the day, sources said SBI along with some other financial institutions would bail out Yes Bank, with the government giving the go-ahead.
“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,” the RBI said in a statement late in the evening.
The actions from the RBI come hours after sources said the government has approved a plan wherein State Bank of India (SBI) and other financial institutions would bailout Yes Bank.