After Punjab & Maharashtra Co-operative Bank (PMC), the Reserve Bank of India (RBI) on Thursday imposed a month-long moratorium on Yes Bank citing “serious deterioration in its financial position”, capping the withdrawal limit at Rs 50,000. The RBI in a press release said that the financial position of Yes Bank has undergone a steady decline due to the bank’s inability to raise a capital to address potential loan losses and resultant downgrades.
Soon after the announcement, the hashtag #yesbankcrises started trending like the same case of PMC bank. After the statement, the depositors in Mumbai rushed to the ATMs to withdraw cash. On Thursday late evening, the RBI restricted withdrawal from Yes Bank at Rs 50,000 for the next one month and it is said that the restriction will remain in place until April 3, 2020.
The RBI statement stated, “This has been done to quickly restore depositors’ confidence in the bank including by putting in place a scheme for reconstruction or amalgamation.”
After the RBI moratorium notice on Yes Bank, the digital payment firm PhonePe suffered an outage in services. Reportedly, PhonePe, is the largest payments partner of YES Bank.
Yes Bank Ltd. placed under Moratoriumhttps://t.co/GcAFiDs6CU
— ReserveBankOfIndia (@RBI) March 5, 2020
On Friday PhonePe’s co-founder and CEO Sameer Nigam confirmed the outage through a tweet. He tweeted, ““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!.”
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!
— Sameer.Nigam (@_sameernigam) March 6, 2020
The RBI asked the depositors of Yes bank not to worry adding that the ground reality is quite different.
The YES Bank has been at the forefront of creating a fintech ecosystem in the country and it recently launched multiple API banking services to help startups. Also, the bank surpassed all leading private banks in UPI transactions contributing more than 39 per cent of it in January this year.
According to the RBI, the withdrawal cap is Rs 50,000. However, there are a few exceptions to the rule. In case of a medical emergency, higher education, for marriage, and other unforeseen emergencies the withdrawee can withdraw up to Rs 5 lakh. But by witnessing the current situation it seems that it will take time to get things back on the tracks.
