Govt imposes withdrawal limit on Yes Bank, SBI to acquire stakes
New Delhi/IBNS: In a major crisis for Yes Bank, the government on Thursday imposed a withdrawal limit of Rs 50,000 for depositors of the beleaguered private bank.
A notification, issued by the finance ministry on Thursday evening, said the limit will stay in effect till April 3, 2020.
The restriction has been imposed as a part of an order of moratorium issued by the government which also stayed the "commencement or continuance of all actions and proceedings" against the bank.
However, the limit will have few exemptions likes in cases of medical emergency, higher education, marriage and unavoidable emergency, the notification mentioned.
Meanwhile, the bank's board has been superseded for a period of 30 days "owing to serious deterioration in the financial position of the Bank", the RBI said in a separate statement
Former SBI CFO Prashant Kumar has been appointed as administrator for Yes Bank.
It has been also reported that the State Bank Of India and Life Insurance Corporation (LIC) are likely to buy 49% stake in Yes Bank.
Yes Bank is facing a major crisis to raise capital to sustain its operations, after being hit by bad debt.
"SBI and LIC will be acquiring preferential shares in the private sector bank at Rs 2 per share," ET Now reported quoting sources The two state-owned entities will pay Rs 490 crore for the stake, the report claimed.
Earlier, Yes Bank held discussions with several leading investors including global stressed asset specialist JC Flowers & Co, Tilden Park Capital Management, OHA (UK) (part of Oak Hill Advisors) and Silver Point Capital to raise funds.
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