Mumbai/New Delhi: The moratorium imposed by the Reserve Bank of India (RBI) on the capital-starved Yes Bank, has unleashed chaos with hundreds of account holders rushing to withdraw money from the private lender's ATMs and branches.
Security at Yes Bank headquarters, its branches and ATMs across Mumbai was tightened to avert any untoward incident.
The RBI also capped withdrawals from Yes Bank at Rs 50,000 per account.
Account holders rushed to branches of the bank and their ATMs in panic to withdraw money on Friday morning, leading to chaos at many centres, including the one in south Mumbai's Fort area.
"We have deployed police personnel outside the bank headquarters, its branch offices and ATM centres in the city to avert any kind of law and order issue," a spokesperson of the Mumbai Police said.
The police are constantly monitoring the situation and so far, no untoward incidents have been reported, he said.
FM, RBI governor assure depositors
Finance Minister Nirmala Sitharaman on Friday assured Yes Bank depositors that their money is safe and the RBI is working on an early resolution of the issue.
I'm in continuous interaction with the Reserve Bank of India (RBI). The central bank is fully seized of the matter and has assured they will give a quick resolution. I want to assure every depositor that their money shall be safe. Their money is safe, Sitharaman told reporters here.
She said the steps taken are in the interest of depositors, banks and the economy.
We are fully of seized of the development. RBI governor has assured me that there will be no loss to any depositor, she added.
Defending the timing of Yes Bank's moratorium, Reserve Bank of India Governor Shaktikanta Das on Friday assured swift resolution to the issues concerning the beleaguered lender.
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 told reporters here.
The Moratorium and the cap
The Reserve Bank on Thursday imposed a moratorium on the capital-starved Yes Bank,capping withdrawals at Rs 50,000 per account and superseded the board of the private sector lender with immediate effect.
Yes Bank will not be able to grant or renew any loan or advance, make any investment, incur any liability or agree to disburse any payment.
Sitharaman insisted the immediate priority was to ensure Yes Bank customers are able to withdraw money within Rs 50,000 limit.
For the next month, Yes Bank will be led by the RBI-appointed administrator Prashant Kumar, an ex-chief financial officer of SBI.
The board of country's largest lender State Bank of India on Thursday gave an "in-principle" approval to invest in the capital-starved Yes Bank.
Yes Bank has been struggling to execute a capital raising plan for the last six months. Its core equity tier-I ratio had slipped to 8.7 per cent as of September.
The bank had also delayed its December quarter results.
(With inputs from PTI.)
