The RBI’s decision to take over the board of Yes Bank and put it under moratorium for one month, with a withdrawal cap of Rs 50,000 for the depositor for one month, has created panic among not just the depositors of the bank and salary account holders but also among those who have their loan EMIs and mutual fund SIP auto debit mandate from their Yes Bank accounts as well as those having investment in its shares.
While individuals are looking to safeguard their respective interests, here is a primer to what you can do if you have exposure on one or more aforementioned aspects.
Yes Bank crisis: What happens to your deposit?
While there is anxiety among depositors as to what will happen to their fixed deposits or money in the savings or current accounts, it must be first clarified that all depositors having exposure of up to Rs 5 lakh can breathe easy, as the government has recently raised the deposit insurance cover to Rs 5 lakh per account from Rs 1 lakh per account. In any case, since the government and the RBI have shown their resolve to revive the bank and the RBI has already announced a scheme of reconstruction for Yes Bank, it should give adequate confidence to depositors and account holders.
The RBI has also said the bank may allow payment to its depositors an amount in excess of Rs 50,000 to meet unforeseen expenses — medical treatment, higher education of the depositors or marriage or other ceremonies.
Will the EMI bounce lead to penalty or affect your credit score?
Since the limit for all transactions with Yes Bank stands at Rs 50,000 for the period of moratorium, if an investor has loan EMI debit mandate exceeding Rs 50,000, the transaction will not go through. Yes Bank customers will be required to change their debit mandate to other bank or will have to wait for the situation to normalise (expected within one month) to honour their payment to another bank or financial institution. However, bankers say since the situation has been created because of special moratorium imposed by RBI, banks won’t impose any financial liability on Yes Bank customers if their debit mandates do not get honoured. There will be no penalties for late payment. Bankers say they will ensure that the default in payment for the month does not hamper the credit score of the customer.
What should you do for MF SIPs or redemption receipts?
As for SIPs, mutual fund players say they will facilitate for the SIP payment at a later date in case the amount for Yes Bank account holder exceeds Rs 50,000. The customer will either have to change the ECS mandate, or can make the SIP payment at a later date.
As for mutual fund redemptions that are due over the next few days into Yes Bank account of customers, almost all mutual funds reached out to their customers requesting them to change their bank mandate. While they processed the redemption they did not process the payment to Yes bank accounts as the customer would then not have been able to withdraw the money. In cases where the customers changed their bank mandate, the redemption amount would get transferred into the new bank account (other than Yes Bank) or they would prepare a cheque in the name of the customer to be deposited into their other bank account.
What should the Yes Bank investors do?
The shares of Yes bank have been extremely volatile over the last couple of days. While it jumped 27 per cent on Thursday, it traded between Rs 5.55 per share and Rs 33.2 per share on the BSE on Friday. The volatility is likely to continue over the next few days, as the details of the revival plan come out. Experts say since the government and the RBI are working out on a plan to infuse capital in the bank by roping in State Bank of India and other banks, long-term investors should wait for the development to play out before booking losses in a hurry.
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What happens to those having business accounts with Yes Bank?
If you are a merchant who uses payment gateways or a stock investor using services of certain brokerage firms, you may not be able to withdraw funds into your Yes Bank accounts. To protect funds from getting blocked in Yes Bank accounts, some companies are withholding payouts to such accounts. These include Paytm Payments Bank, MSME-focussed payments gateway firm Instamojo, stock-brokerage Zerodha, among others. These firms have urged their customers to change their linked accounts to ones that are not with Yes Bank to be able to withdraw their funds.
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