Yes Bank to resume operations from 19 March; customers will be able to access all digital services, platforms

Placing Yes Bank under a 30-day moratorium, the central bank imposed limits on withdrawals to protect depositors and said it would work on a revival plan.

FP Staff March 16, 2020 13:16:53 IST
Yes Bank to resume operations from 19 March; customers will be able to access all digital services, platforms

Yes Bank will resume operations from Friday, according to news reports.

The Reserve Bank of India (RBI) on 5 March took control of Yes Bank, after the lender—which is laden with bad debts—failed to raise the capital it needs to stay above mandated regulatory requirements.

"This has been done to quickly restore depositors' confidence in the bank, including by putting in place a scheme for reconstruction or amalgamation," the RBI said in a statement.

Yes Bank to resume operations from 19 March customers will be able to access all digital services platforms

Representational image. Reuters.

Former State Bank of India CFO Prashant Kumar was appointed the administrator.

"The order of moratorium on the reconstructed bank issued by the government...shall cease to have effect on the third working day at 18:00 hours fron the date of commencement of this scheme," the notification said.

Placing Yes Bank under a 30-day moratorium, the central bank imposed limits on withdrawals to protect depositors and said it would work on a revival plan. The move spooked depositors, who rushed to withdraw funds from the bank.

Last week, Prashant Kumar, told the CNBC TV18 channel, assured depositors their money was safe and that the moratorium on Yes Bank might be lifted much before the deadline of 3 April and normal banking operations might resume as early as Friday.

Yes Bank has been grappling with mounting bad loans and has been struggling to raise fresh capital.

Rights & liabilities of new board

The notification also clarified that "all existing contracts, agreements, etc., will continue as before the reconstruction scheme. The deposits and liabilities, liabilities and obligations of creditors will also continue as before."

"All employees to continue to be employees of the reconstructed bank on the same terms and conditions for a minimum of a year," it stated, adding that the board of directors may discontinue services of key managerial personnel "as deemed necessary".

"Moratorium on the bank to be lifted on the third working day at 18.00 hours (6 pm) from date of commencement of the scheme," it stated.

This is in line with what Finance Minister Nirmala Sitharaman had stated on March 13 in regards to the moratorium on Yes Bank.

The notification has to this effect stated: "The order of moratorium on the reconstructed bank issued by the Government of India in the Ministry of Finance, Department of Financial Services dated March 5, 2020, shall cease to have an effect."

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