The Reserve Bank on Thursday imposed a moratorium on the capital-starved Yes Bank and capped withdrawals at ₹50,000 per account till further orders.
The board of Yes Bank has also been superseded with immediate effect, the Reserve Bank of India (RBI) said in a late evening statement.
The RBI also assured the depositors of the bank that their interest will be fully protected and there is no need to panic.
Former SBI CFO Prashant Kumar has been appointed as administrator for Yes Bank.
However, Yes Bank will be able to pay salaries to its over 20,000 employees, the RBI said.
The latest development comes six months after the regulator did the same with the city-based cooperative lender PMC Bank after a large scam was unearthed.
Yes Bank has been grappling with mounting bad loans.
Earlier in the day, sources said SBI along with some other financial institutions would bail out Yes Bank, with the government giving the go-ahead.
However, the depositors will be allowed to withdraw more than ₹50,000 under the following conditions:
- In connection with the medical treatment of the depositor or any person actually dependent on him.Yes
- Towards the cost of higher education of the depositor or any person actually dependent on him for education in India or outside India.
- To pay obligatory expenses in connection with marriage or other ceremonies of the depositor or his children or of any other person actually dependent upon him.
- In connection with any other unavoidable emergency.
*With inputs from agencies
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