In exercise of the powers conferred by sub-section (2) of section 45 of the Banking Regulation Act, 1949 (10 of 1949), the Central Government, through the Ministry of Finance has imposed moratorium on Yes Bank Limited w.e.f. 6PM of March 5, 2020 till April 3, 2020. The decision has been taken on the recommendations of Reserve Bank of India (RBI) under sub-section (1) of section 45.
- During the period of moratorium, withdrawal from Yes Bank is restricted to Rs 50,000 per account per month. If a depositor maintains more than one account then also the total amount payable from all the accounts together should not exceed Rs 50,000.
- However, RBI has permitted Yes Bank to allow payments to its depositors in case of unforeseen expenses like medical treatment, higher education, marriage or unavoidable expenses. In this case the sum should not exceed Rs. 5,00,000 or the actual balance lying to the credit of the account of such depositor, whichever is less.
Appointment of Prashant Kumar as YES Bank Administrator
In exercise of the powers conferred under 36ACA of the Banking Regulation Act 1949, RBI has also superseded (replaced) the board of YES bank with immediate effect by appointing ex- Deputy Managing Director (DMD) & Chief Financial Officer (CFO) of SBI Prashant Kumar as its administrator for a period of 30 days citing serious deterioration in the financial position of the Bank. His appointment has been made under Section 36ACA (2) of the Act.
Reason behind moratorium on YES Bank
The financial position of Yes Bank has declined due to its inability to raise capital to address potential loan so in the absence of a credible revival plan, and in public interest and the interest of the bank’s depositors, Centre has to apply moratorium.
About YES Bank:
Headquarter– Mumbai, Maharashtra
Tagline– Experience our Expertise
About Reserve Bank of India (RBI):
Headquarters– Mumbai, Maharashtra
Formation– 1 April 1935
Governor– Shaktikanta Das
Deputy Governors– 4 (Bibhu Prasad Kanungo, N S Vishwanathan (will retire on March 31, 2020), Mahesh Kumar Jain, Michael Debabrata Patra)