On Thursday, the Reserve Bank of India (RBI) placed Yes Bank under moratorium that has created a situation similar to the PMC-Bank crisis where the central bank has superseded the Board of the private bank for a period of 30 days. If you have a bank account, loan EMI or mutual fund investment linked with Yes Bank, you are bound to be worried about the uncertainty over the restrictions imposed.
The unanticipated curbs on withdrawals may have left your alarmed. Here's what we know up till now:
- Withdrawal limits on Yes Bank accounts are capped at Rs 50,000 per person for 30 days with effect from the evening of 5 March.
- This cap is an aggregate of all accounts held with the bank- savings, deposits and current accounts.
- Yes Bank cannot grant or renew any loan or advance, make any investment, incur any liability during the 30 day period.
- Prashant Kumar, ex-DMD and CFO of State Bank of India, has been appointed as the administrator as RBI works on restoring order in the bank, "including by putting in place a scheme for reconstruction or amalgamation."
What if you have a salary account or regular account with Yes Bank?
You may have to look for alternative ways to arrange funds for the month if you require over Rs 50,000. Your regular transactions like fund transfer, cheque clearances, etc will function as usual but cannot exceed the Rs 50,000 limit.
The withdrawal limit will be effective until 3 April.
It is likely that RBI will increase the limit before the 30-day period after more clarity is attained on the future of Yes Bank.
If you an employee of Yes Bank, you will receive your salary payments up to a limit of Rs 50,000.
What about your EMI, SIPs or insurance premium disbursements?
The Rs 50,000 limit has been placed on all payments made by Yes Bank, which means that an issue will arise if your monthly out-go towards EMI, SIP or insurance premium is over Rs 50,000 up to 3 April.
Is your mutual fund investment linked to Yes Bank account?
You can raise a change of account request at a nearby CAMS office so that your future income from mutual fund redemptions or dividends is not blocked.
Will you lose your money deposited in the bank account?
Chief Economic Advisor Krishnamurthy Subramanian told reporters on Friday, "The RBI has taken right steps. Yes Bank depositors' money is safe."
"The resolution will be done very swiftly, it will be done very fast. 30 days which we have given is the outer limit. You will see a very swift action from RBI," said RBI governor Shaktikanta Das to reporters after ASSOCHAM's 15th annual banking summit.
RBI has asserted that a resolution will be made within days. The board of SBI has reportedly given "in-principle" approval to invest in Yes Bank. LIC is also reportedly directed to bail out the bank as RBI will consider reconstruction as well as amalgamation to protect Yes Bank's customers.
While the government assures the safety of bank deposits, you should also know that the insurance limit for depositors was recently increased to Rs 5 lakh per depositor. This means that your aggregate deposit across accounts with Yes Bank, including lockers is secure up to the extent of Rs 5 lakh, if the private bank were to be dissolved.