Friday, March 1, 2024
Home > Uncategorized > Yes Bank share price crashes 72 pct; Rs 50,000 cap on cash withdrawal after RBI takes charge

Yes Bank share price crashes 72 pct; Rs 50,000 cap on cash withdrawal after RBI takes charge


Private lender Yes Bank lost nearly three-fourth of its share value during Friday`s early trade after RBI superseded its board on Thursday.

At 11.37 a.m., Yes Bank shares plunged over 72 per cent to Rs 10.20 a share.

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The SBI board had given the largest lender an “in-principle” approval to invest in the capital-starved Yes Bank.

The central bank has also imposed a moratorium on the private lender till April 3, 2020. Withdrawals from the bank have been capped at Rs 50,000 per depositor.

Moody’s on Yes Bank had said that RBI`s moratorium on Yes Bank is credit negative as it affects timely repayment of bank depositors and creditors.

While Moody`s expects Indian authorities will take steps to prevent the weakness in the bank`s viability from significantly impacting its depositors and senior creditors, the lack of a coordinated and timely action highlights continued uncertainty around bank resolutions in India.

PhonePe services hit as partner Yes Bank put under moratorium

Payment services provider PhonePe has suffered an outage after the Reserve Bank of India (RBI) on Thursday put the bank under moratorium.

In a tweet, PhonePe said that its services are temporarily unavailable as it is going through an unscheduled maintenance activity.

“We are temporarily unavailable. We are going through an unscheduled maintenance activity. We apologise for any inconvenience this may cause. We`ll be back soon,” it said.

Sameer Nigam, founder CEO of the company, however, confirmed that the outage is a result of placement of Yes Bank under the moratorium.

“Dear @PhonePe_ customers. We sincerely regret the long outage. Our partner bank (Yes Bank) was placed under moratorium by RBI. Entire team`s been working all night to get services back up asap. We hope to be live in a few hours. Thanks for your patience. Stay tuned for updates,” Nigam tweeted.

The apex bank on Thursday evening placed the bank under moratorium for 30 days and capped the withdrawals from Yes Bank at Rs 50,000. It also superseded the board of directors of the private lender for 30 days and appointed former SBI CFO Prashant Kumar as the bank`s administrator.

The RBI said the financial position of Yes Bank Ltd has undergone a steady decline, largely due to the bank`s inability to raise capital to address potential loan 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 its steady decline.

The development has also caused somewhat panic among a section of Yes Bank account holders who rushed to the ATMs after the RBI announcement and many reportedly found that ATMs had run out of cash.


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