One of India's leading private lenders, Yes Bank on Thursday was put under moratorium by the Ministry of Finance, capping the withdrawal to a maximum Rs 50,000 for its depositors with exemption in some cases. The cap includes the aggregate amount across all bank accounts including saving, deposits and current accounts. A depositor will be allowed to withdraw up to Rs. 5 lakh under special cases like medical emergency, higher education fees, marriage, and unavoidable emergency.
The Reserve Bank of India has superseded the board of troubled private sector lender Yes Bank with immediate effect. Former State Bank of India CFO Prashant Kumar has been appointed the administrator. The decision has sent shock waves in India's already struggling financial market. Retail Depositors with their money with Yes Bank across the country are in a state of panic and have been withdrawing money as much as they can. Here's what a Yes Bank account holder should know:-
SBI tries to calm down depositors
With panic spreading like a wildfire government and the State bank of India has been trying to calm down the depositors."I want to assure every depositor's money is safe, and I'm in constant touch with RBI," Finance Minister Nirmala Sitharaman said.
What it means for depositors
Depositors having a salary account with Yes Bank are expected to face the brunt most but there are alternatives. In special cases, the Human Resource department of companies has the power to credit the salary in other accounts. So if you are yet to get your monthly remuneration for this month, you can speak to your HR department to get it credited into another account. Finally, if you're monthly expense solely runs on your salary deposited in Yes Bank account, time to use emergency funds.
Further, if you have an EMI or a SIP of more than Rs 50,000 linked to your Yes bank account due for today, it must have been bounced now. The payments of insurance premiums will also face a similar issue. In these cases, customers can reach out to their banks or brokers asking for some alternatives to ensure the smooth transaction of funds to their mutual funds and towards the payment of EMIs.
In fact, some of the fund's houses have been proactively providing alternatives and information has been disseminated through social media. "If clients want to change their Redemption bank account mandate from Yes Bank to any other bank they can send a request to Mutual@kotak.com. We shall process the request for tomorrow's redemptions so that their money isn't blocked,'' read a tweet by Nilesh Shah, MD & CEO, Kotak Mahindra Asset Management Company Ltd.
