“Yes Bank” Withdrawal Limit may end within a week: SBI Chief
NEW DELHI : The inconvenience and uncertainty faced by Yes Bank depositors may be short lived as the Chairman of State Bank of India (SBI) Rajnish Kumar has said that the moratorium imposed could be lifted within a week”s time.
Assuring the depositors of safety of their hardearned money, Kumar said that once the state-run lender steps in there should not be any worry about money as the financial system is sound, media reports said.
Kumar also assured the depositors that it will be business as usual for Yes Bank with SBI”s entry. His statement gains significance as both depositors and investors are concerned about the the future of the bank and its capital adequacy. As per the Reserve Bank of India”s (RBI) draft reconstruction scheme for the crisis-hit private lender, SBI will take up 49 per cent in the bank.
Currently, the withdrawal limit of the bank has been capped at Rs 50,000 till April 3. On Thursday, the apex bank placed the private lender under moratorium and capped the withdrawal limit.
The Chairman of India”s largest bank has also said that he did not receive any direction from the government directly and the bank is closely working with the apex bank. Kumar”s statement comes a day after Chief Economic Adviser (CEA) Krishnamurthy Subramanian said that there is no reason to worry as India”s banks have adequate capital.
The Reserve Bank of India last week also superseded Yes Bank”s board of directors and appointed former State Bank of India CFO Prashant Kumar as its administrator. The SBI has agreed to immediately invest Rs 2,450 crore to buy 49 per cent stake in Yes Bank.
The new Board of Directors will stand constituted from the appointed date. lt will consist of a CEO and MD, Non Executive Chairman and Non Executive Directors. SBI will have nominee Directors appointed on the board of the reconstructed bank.
RBI may appoint additional directors to the Board. The members of the Board so appointed shall continue in office for a period of one year, or until an alternate Board is constituted by Yes Bank Ltd. SBI will not reduce its holding below 26 per cent before completion of three years from the date of infusion of the capital.
In an exclusive interaction with NDTV, the SBI chairman said: “I want to assure Yes Bank customers that once we (SBI) step in they shouldn’t worry about money… The financial system is sound.”
His comments come at a time when SBI has committed to invest in the troubled private sector lender, whose board was suspended and withdrawals capped by the Reserve Bank of India (RBI) last week, spooking investors.
Mr Kumar said it is a collective effort by the RBI, the government and SBI, he said. “There is a certain process for lifting the moratorium and bringing in new capital… Effort is that they do it within a week or less than that,” he said.
Currently, the RBI – which took control of Yes Bank last week – has capped Yes Bank withdrawals at Rs 50,000 till April 3 and imposed limits on withdrawals to protect depositors.
As part of the RBI-backed bailout plan for the troubled lender, SBI has agreed to immediately invest Rs 2,450 crore to buy 49 per cent stake in Yes Bank as part of the rescue deal.
“The stability of the financial system is the responsibility of the RBI. As per law, the RBI has to consult the government, and SBI is the largest bank in the country… I don’t think anybody can act solely (in saving Yes Bank): RBI, government or SBI. It is part of a collective effort Mr Kumar added. (With Agency Inputs ).
