The Reserve Bank of India Thursday evening superseded the board of Yes Bank and has put curbs on its operations till April 3. The central bank appointed Prashant Kumar as the new administrator of the bank and is expected to come up with a restructuring plan shortly. Here is a quick lowdown on the development.

Why did the RBI supersede the Yes Bank board?

The central bank said in its press release that it was taking this step because of a serious deterioration in the financial health of the bank. This is the first time that a bank as big as Yes Bank is being put under a moratorium under the RBI.

Is some other bank taking over Yes Bank?

The State Bank of India board has given an in-principle approval to consider an “investment opportunity” in Yes Bank. But it is not clear at this stage if it will take over Yes Bank. There is talk that a consortium of state-owned financial institutions, led by SBI, may work out a rescue plan.

What happens to depositors’ money?

Each depositor will be able to withdraw only up to Rs 50,000 till the moratorium is in place. However, depositors can withdraw up to Rs 5 lakh, or the amount lying in the account, whichever is less, in circumstances such as a medical emergency or marriage.

Does the cap apply to both current accounts and savings accounts?

Yes. It applies to both.

Can Yes Bank make or renew any fresh loans?

No, it cannot. However, the bank can make payments towards staff salaries, rent, taxes and legal expenses.

How much deposits does Yes Bank have?

According to media reports, Yes Bank had around Rs 2.1 lakh crore in deposits as on September 2019. However, this number would have reduced significantly as talks of the bank being in trouble have been doing the rounds for a while now.

How long will the moratorium apply?

The bank has been placed under a moratorium from March 5 until April 3.

Will depositors be able to withdraw more money after the moratorium lifts on April 3?

RBI intends to restructure or amalgamate the bank with another bank by the end of the 30-day period starting March 5. Once this exercise is completed, and capital levels restored, depositors may be able to withdraw more money as required.

First Published:Mar 6, 2020 8:31 AM IST