Markets Set To Plunge On Crisis At Yes Bank

Indian stock markets are set to plunge in trade on Friday, as crisis at Yes Bank unfolds. The government may have to move in swiftly to clarify as this may have a cascading impact of faith in other private sector banks in the country.

As per reports, State Bank of India is likely to pick a stake in the bank. Yes Bank is the fourth largest private sector bank in the country and has a solid franchisee and cannot be allowed to go bust.

A lot of investors have parked money in the bank, given that the bank offered a lucrative rate of interest of 6 per cent on savings accounts.

Account holders at Yes Bank, who were trying to transfer money after the RBI cap on Rs 50,000 could not do so. "Due to heavytraffic, on our netbanking, we are unable to process your request", a message read for account holders.

Crisis At Yes Bank will further cripple confidence in the banking sector, which is plagued with rising non performing assets and problems at PMB Bank earlier. The industry has for years been plagued by non performing assets and things only seem to be getting worse.

Trouble had mounted for Yes Bank in the last few quarters, with rising non performing assets.

The Reserve Bank of India has assured depositors of the bank that their interest will be fully protected and there is no need to panic.
"In terms of the provisions of the Banking Regulation Act, the Reserve Bank will explore and draw up a scheme in the next few days for the bank's reconstruction or amalgamation and with the approval of the Central Government, put the same in place well before the period of moratorium of thirty days ends so that the depositors are not put to hardship for a long period of time".