The Reserve Bank on Thursday imposed a moratorium on the capital-starved Yes Bank and capped withdrawals at Rs 50,000 per account till further orders.
The board of Yes Bank has also been superseded with immediate effect, the Reserve Bank of India (RBI) said in a late evening statement. Former SBI CFO Prashant Kumar has been appointed as administrator for Yes Bank.
Here’s what we know about the situation so far:
- The RBI’s decision came hours after sources quoted by news agency PTI said the government has approved a plan wherein State Bank of India (SBI) and other financial institutions would bailout Yes Bank.
- If the plan is implemented, it would be the first major instance in many years where a private sector lender would be bailed out using public money.
- In 2004, Global Trust Bank was amalgamated with Oriental Bank of Commerce and in 2006, IDBI Bank took over United Western Bank.
- The curbs on Yes Bank come after similar action was taken against fraud-hit cooperative lender PMC Bank in September, where depositors are still in the lurch.
- YES Bank's stock rose 26 per cent to Rs 37 per share following the media reports while SBI's shares had fallen nearly 4 per cent after the news but recovered and were later trading 3 per cent higher at Rs 293.
(with inputs from PTI and IANS)