NEW DELHI: With the central bank putting restrictions on the troubled private lender Yes Bank, there are rising worries among customers regarding what account holders have access to amid the ongoing crisis. In an unprecedented move, the Reserve Bank of India (RBI) superseded the Yes Bank board and capped its withdrawal limit by placing it under a moratorium.
Here’s what need you need to know if you are an account holder of Yes Bank:
Have a salary account with Yes Bank … now what?
The RBI has capped the withdrawal limit at Rs 50,000 for a duration of 30 days. A salary account holder need to look at alternate ways to get the salary amount if it exceeds Rs 50,000.
What happens if a customer has multiple accounts?
If a depositor maintains more than one account, the total amount payable from all the accounts together “shall not exceed” Rs 50,000-limit.
Deposit insurance scheme?
According to the scheme, a customer gets up to Rs 5 lakh from the ‘Deposit Insurance and Credit Guarantee Corporation’ when a lender collapses. But, this would only be done when all the ways to rescue the bank fails.
EMIs or fund transfers?
Banking transactions, for instance fund transfer, cheque clearances and EMIs (equated-monthly inslatments), are likely to remain unaffected if the value remains within the Rs 50,000 bracket.
Yes Bank’s future?
The bank won’t be able to grant or renew any loan or advance, make any investment, incur any liability or agree to disburse any payment.
For the next month, Yes Bank will be led by the RBI-appointed administrator Prashant Kumar, an ex-chief financial officer of State Bank of India (SBI).
Yes Bank’s exposure to the shadow banking sector is particularly large and it has been struggling for some time to raise fresh capital to free itself of a mountain of bad loans in order to quell worries about its viability. The lender has over Rs 2,400 crore loan exposure with the crisis-hit IL&FS group.
“Investors have turned risk averse and the contagion is likely to hit smaller bank and non-bank finance companies,” Abhimanyu Sofat at IIFL Securities, told news agency AFP.
Yes Bank employees’ fate
The RBI clarified that the bank will also be able to pay salaries to its over 20,000 employees and also rents. Although, this is too early to comment on the fate of employees as the revival plan is under process.
The RBI said it would swiftly work on a revival plan. “It will be done very swiftly, it will be done very fast,” RBI governor Shaktikanta Das said about the rescue plan for the bank.
“Let me assure you that the Indian banking sector continues to be sound and safe,” he added.
If merged with SBI?
In this scenario, it will be certainly a great news for Yes Bank. SBI is the country’s largest lender and acquisition by it might indicate that Yes Bank is safe.
(With agency inputs)
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