YES Bank’s Cash Withdrawal Limit Stands at Rs.50,000
Highlights:
- YES Bank cash withdrawal limit capped at Rs.50,000 by RBI
- YES Bank has been placed under a moratorium of one month, starting from 5 March until 3 April, 2020
- Restrictions on both current as well as savings account customers
- Under certain emergency conditions account holders can withdraw cash of up to Rs.5 lakh
- The withdrawal limit for depositors may remain in effect for this period unless the RBI releases another notification
- Within a month, the RBI will decide a plan of action for YES Bank and also assured the depositors that there is no need to panic
The Reserve Bank of India (RBI) on Thursday put restrictions on the cash withdrawal for YES Bank Customers. As per RBI’s directive, YES Bank customers can only withdraw up to Rs.50,000 from their respective bank accounts for a month starting from 5 March until 3 April, 2020. The Central Bank of India has also notified that YES Bank can not renew or grant any loan or advance and also cannot invest or incur any liability. In addition to this, the bank also cannot transfer or dispose of properties or assets.
YES Bank has been placed under a moratorium and is constantly watched by the RBI. Moreover, the Reserve Bank of India is also coordinating with more banks to form a consortium of banks just to review. However, the top officials of RBI have stated that the YES Bank crisis will be resolved in a month.
Though apex bank has imposed restrictions on money withdrawals for both current as well as savings account customers, under certain emergency conditions account holders can withdraw cash of up to Rs.5 lakh. The bank will show leniency towards emergency conditions like medical treatment, higher education, paying obligatory expenses in case of marriage or any unavoidable emergency. Within a month, the RBI will do a thorough inspection of YES Bank and will decide a plan of action so that the depositors will not face hardship for a long period.
The RBI’s Plan of Action
However, the Central Bank of India will soon have a clear picture of the asset quality of the bank as Mr. Prashant Kumar, former Deputy Managing Director and CFO of State Bank of India is investigating the case as an Administrator hence will present a report in front of the RBI. Speculations are being made that RBI might do a merger, takeover by another entity or put more capital from public sector banks and other financial institutions.
Why Did YES Bank Collapse?
According to experts, the actual reason for YES Bank’s collapse was price due issues such as deteriorating financial position, governance issues, false assurance on raising funds, non-serious investors, and outflow of liquidity.
What RBI Says
Moreover, The Reserve Bank has assured the depositors of YES Bank, there is no need to panic as this crisis will be resolved shortly.
