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Yes Bank crisis: Despite Sitharaman’s assurance, depositors flood branches; long queues at ATMs

Yes Bank Crisis: Distress calls and long queues of customers were witnessed at various branches of Yes Bank after the Reserve Bank of India put a withdrawal limit of Rs 50,000 on Thursday

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New Delhi Updated on: March 06, 2020 18:38 IST
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Yes Bank Crisis: A man wearing protective mask walks past a queue of account holders outside Yes Bank, in Ahmedabad, Friday, March 6, 2020. The central bank on Thursday imposed a moratorium on the capital-starved Yes Bank, capping withdrawals at Rs 50,000 per account and superseded the board of the private sector lender with immediate effect (PTI)

Distress calls and long queues of customers were witnessed at various branches of Yes Bank after the Reserve Bank of India put a withdrawal limit of Rs 50,000 on Thursday, as the cash-starved private sector lender comes under a moratorium for one month.

Finance Minister Nirmala Sitharaman said earlier in the day that Yes Bank employees will continue to get salaries, as she sought to assuage fears emanating from the virtual collapse of India's fourth-largest private sector bank. "All employees of the reconstructed bank will continue in service with the same remuneration, terms and conditions of service for at least a year," she said.

The bank's board has been superseded by RBI-appointed administrator Prashant Kumar, former deputy managing director and chief financial officer of State Bank of India. On Thursday, the RBI in consultation with the Union government superseded the bank's board of directors due to serious deterioration in the bank's financial position.

"This has been done to quickly restore depositors' confidence in the bank, including by putting in place a scheme of reconstruction or amalgamation," the RBI said in a late-night communication on Thursday.

It also appointed Kumar as the bank's administrator under Section 36ACA (2) of the Banking Regulation Act, 1949.

A moratorium of 30 days has been imposed on the cash-strapped Yes Bank, restricting withdrawals up to Rs 50,000 per depositor.

While customers complained about net banking not working, many resorted to microblogging site Twitter to express anguish that they were not able to withdraw money, posting screenshots that they were getting "connection error".

One of the customers wrote on Twitter that he wants to close his savings account but "how can I do it online?".

"We are facing intermittent issues in net banking. Request you to please try after some time," Yes Bank said in response to the tweet.

The Mumbai-headquartered private sector bank has also changed its toll-free phone banking number to 18001200 from 18002000.

However, it seems that the sense of crisis started brewing among the customers even before the RBI's Thursday move as messages dating back to March 3, 4 or before could be traced on the bank's twitter handle, customers complaining about banking issues with some even resorting to leaving their personal mobile numbers there, asking the bank to revert them back "ASAP".

Besides, the bank is also reported to be sending out messages to customers updating them about bank balances.

A customer of the bank said he faced no problem on Thursday night while transacting through his debit card at a fuel-refilling station.

Even as Finance Minister Nirmala Sitharaman assured the bank's depositors that their money is safe and the RBI is working on an early resolution of the issue, RBI Governor Shaktikanta Das assured swift resolution to the issues concerning the beleaguered lender.

"The resolution (for Yes Bank) will be done very swiftly, it will be done very fast. Thirty days which we have given is the outer limit. You will see a very swift action from the RBI," Das told reporters at a banking event in Mumbai.

(with PTI inputs)

Also read: Yes Bank employees will continue to get respective salaries, says Sitharaman

 

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