NEW DELHI, Mar 6: Distressed and angry customers of the crisis-hit Yes Bank thronged scores of branches and ATMs across the country today to withdraw their deposits even as Finance Minister Nirmala Sitharaman assured them that their funds are safe and the Government will not let any financial institution collapse and the Reserve Bank of India unveiled its restructuring plan public.
Click here to watch video
A day after the RBI capped deposit withdrawals from Yes Bank at Rs 50,000 per account for a month, customers of the bank trooped to their branches today to withdraw deposits. But many were disappointed as they found it difficult to take out the money as the branches failed to disburse and the ATMs in most cases were empty or not functioning.
At a news conference late in the afternoon, the Finance Minister tried to assure depositors saying that the withdrawal cap is temporary and the problem would be resolved “very speedily and a restructuring of the bank will happen.”
The Minister assured that she “will not allow for any institution to fall off a cliff”.
The revival scheme will be completed within 30 days, she said.
Sitharaman said that once the RBI’s restructuring of Yes Bank is completed, a new Board of Directors will be put in place.
Deposits and liabilities will continue unaffected and employment and salaries will be assured for at least one year, she said.
The RBI said the State Bank of India has expressed willingness to invest in Yes Bank. SBI would acquire a 49 per cent stake in the bank at a price not less than Rs 12,000 crore (approximately).
And according to the draft RBI restructuring scheme, Yes Bank’s authorised capital shall stand altered to Rs 5,000 crore from the current Rs 600 crore. The number of equity shares will be increased to 2,400 crore from the current 255 crore (face value Rs 2/- each) aggregating to Rs 4,800 crore.
The SBI shall agree to invest in the equity of the reconstructed bank such that post infusion it holds 49 per cent. The capital infusion will be at not less than Rs 10 per share (Face value Rs 2, Premium Rs 8). SBI shall not reduce its holding below 26 percent for three years from date of capital infusion.
The scheme maintains all current contracts, deeds, bonds, agreements, powers of attorney, grants of legal representation and other instruments of whatever nature.
The scheme proposes continuation of services of current employees at the same terms, for at least one year.
In another development during the day, the National Stock Exchange put restrictions on the lender’s shares in various categories.
The categories placed under restriction include debt, securities lending and borrowing scheme, currency derivatives, commodity derivatives, futures and options, NSE said.
“Due to the recent development in Yes Bank it has been decided that no fresh or renewal of bank guarantees and fixed deposit receipt issued by the bank limited will be accepted,” it said.
The existing benefit provided to members towards Bank Guarantees and Fixed Deposit Receipt issued by Yes Bank in favour of NSE Clearing Ltd, shall also be reduced, the bourse said.
In a separate circular, NSE said “the financial position of Yes Bank has undergone a steady decline largely due to inability of the bank to raise capital to address potential loan and losses and resultant downgrades, triggering invocation of bond covenants by investors and withdrawal of deposits”.
The bank has also experienced serious governance issues and practices in the recent years which have led to steady decline of the bank, it said. (UNI)
Follow our WhatsApp channel
