March 7, 2020 3:26:32 am
A day after the Reserve Bank of India superseded the board of Yes Bank and appointed an administrator, RBI Governor Shaktikanta Das on Friday assured its customers of “swift” action and a scheme “very shortly”, in less than 30 days, even as thousands of customers rushed to withdraw funds and queued up at overcrowded branches across the country.
“The resolution (to Yes Bank) will be done very swiftly, it will be done very fast… 30 days which we have given is the outer limit. You will see a very swift action from RBI,” Das said. While police was deployed to help control the crowds in many branches, businessmen and depositors remained nervous as the RBI has capped withdrawals at Rs 50,000 per depositor. The payment systems of the bank, including Point of Sale (PoS) terminals and ATMs of the bank went offline following the RBI curbs. Fintech companies like PhonePe which use the Yes Bank platform also faced problems.
Das said the decision on Yes Bank was taken at a larger level, not only to deal with the problem in an individual entity, but also to maintain stability and resilience of the Indian financial and banking sector. “Let me assure you that our banking sector continues to be sound and safe. We stand committed to maintaining stability of financial and banking sector,” he said on the sidelines of an event organised by Assocham.
Giving reasons for the moratorium on the bank, Das said, “a market-led and bank-led resolution of the problem is always preferable. You have to give time to the bank management to take step and efforts. And the bank did take efforts. When we found that we cannot wait and should not wait any longer, we decided to intervene. I think the timing is appropriate. I can assure you that RBI will come out with a scheme very shortly,” Das said.
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The bank, which has 1,120 branches and 1,456 ATMs across the country, has a deposit base of around Rs 2 lakh crore. “Yes Bank customers were unable to use debit and debit cards. There’s also confusion about EMIs on home and vehicle loans through the bank’s systems. It’s not clear whether equated monthly installments (EMIs) will be cleared or not. Thousands of customers are using the ECS (electronic clearing service) to pay bills and other charges such as telephone, electricity, water or for making EMI payments on loans as well as SIP investments in mutual funds,” said a customer.
“Since a bank and market led revival is a preferred option over a regulatory restructuring, the Reserve Bank made all efforts to facilitate such a process and gave adequate opportunity to the bank’s management to draw up a credible revival plan, which did not materialise. In the meantime, the bank was facing regular outflow of liquidity,” the RBI said.
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