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Relief for Yes Bank Customers as Crisis-hit Lender Says Services to Resume from Wednesday

News18.com

New Delhi: In major relief for customers, crisis-hit Yes Bank on Monday announced that its banking services would resume from March 18, hours after its shares jumped sharply by over 58 per cent over the Union cabinet approving a reconstruction scheme for the stressed lender.

On March 5, the Reserve Bank of India (RBI) imposed a moratorium on Yes Bank, restricting withdrawals to Rs 50,000 per depositor till April 3. The RBI also superseded the board and placed it under an administrator, Prashant Kumar, former deputy managing director and CFO of State Bank of India (SBI).

The Union cabinet then approved the reconstruction scheme for the bank as part of which the reconstruction was set off with the issue of Rs 10,000 crore of shares to the consortium led by SBI, which also includes IDFC First Bank, Bandhan Bank, Federal Bank, ICICI Bank, HDFC, Kotak Mahindra Bank and Axis Bank.

Shares of Yes Bank on Monday jumped sharply by over 58 per cent after the Union Cabinet on Friday approved reconstruction scheme for the stressed lender. The scrip witnessed a strong comeback and zoomed 58.12 per cent to Rs 40.40 on the BSE. On the NSE, it climbed 58.12 per cent to Rs 40.40.

The cash-strapped lender had on Saturday reported Rs 18,564 crore loss in December quarter. Its gross non-performing assets also shot to 18.87 per cent in December 2019 quarter against 2.10 per cent in the year-ago.

"Lifting of deposit withdrawal moratorium on 18th March could open flood gates and will require a calibrated approach along with active support and signalling from the RBI, government and investor banks," said a report by Emkay Global Financial Services.

The reconstituted bank board too may need more turnaround experts and eminent bankers, it said.

(With PTI inputs)