Yes Bank LIVE Updates: RBI, SBI, govt breathe life into dying lender

Listened to FMs address to the media. It is obvious that the crisis has been in the making since 2017 and the government did practically nothing except talk to the RBI.

P. Chidambaram (@PChidambaram_IN) March 6, 2020

As expected, the FM has indirectly blamed the UPA for the near collapse of YES Bank contrary to her own claim that the crisis started in 2017.

P. Chidambaram (@PChidambaram_IN) March 6, 2020

Did you notice that the FM did not acknowledge the numbers of the loan book of YES Bank? Did you notice that FM did not explain how the loan book miraculously jumped from Rs 55,633 crore in March 2014 to Rs 2,41,999 crore in March 2019?

P. Chidambaram (@PChidambaram_IN) March 6, 2020

FM was focused on what happened during the UPA. What happened was UPA did not allow any bank to reach a state of collapse. Under UPA, weak banks were merged with other banks well in time to avoid a crisis.

P. Chidambaram (@PChidambaram_IN) March 6, 2020

The decisions to merge were taken by RBI Governors Dr C Rangarajan and Dr Y V Reddy. Why doesnt the FM call them and ask them to explain their decisions? She might find that the decisions were correct and taken by competent Governors.

P. Chidambaram (@PChidambaram_IN) March 6, 2020

What is the government doing today? Is the government not merging weak public sector banks with stronger public sector banks?

Naturally, FM blamed the legacy of UPA. She will say that for the rest of the tenure of the BJP government!

P. Chidambaram (@PChidambaram_IN) March 6, 2020

5.26 PM: I acknowledge the pain faced by depositors, says FM Sitharaman.

5.22 PM: We have taken a considered view that supecession should happen. It is because we are closely working to make sure that no institution really collapses, says the FM. We are working for restructuring, protecting depositors' interest and investors' money, she further says.

5.20 PM: SEBI has already started looking into YES Bank as a regulator, we will be able to comment on it (whether other investigative agencies will join the probe) as we go ahead, says the FM.

5.18 PM: Our approach has been to ensure that institutions don't collapse... and above all keep the clients' iinterests safe. That is why, Prime Minister insisted that we increase deposits' insurance from Rs 1 lakh to to Rs 5 lakh, says the FM.

5.14 PM: These "self-appointed competent doctors" were the ones who handled United Western Bank which almost collapsed in 2006, forcefully merged with IDBI Bank, says the FM. The merger is causing problems now in restoring good health of IDBI Bank, she further says.

5.12 PM: Some of the very stressed corporates have been since before 2014, says the FM, listing names including Anil Ambani group, Vodafone, IL&FS, Essel Group.

5.11 PM: Employment and salaries continued for at least one year, assures the Finance Minister.

5.10 PM: Deposits and liabilities will continue unaffected, she further says.

5.10 PM: A new board will be put in place, says the FM

5.09 PM: Scheme for restructuring the bank will be in effect within the the period of moratorium, so that depositors are not troubled for long, says the FM

5.05 PM: Govt completely committed of the ensure safety of depositors money, says Sitharaman

5.05 PM: "I have askeed RBI now to assess what caused this problem and clearly identify roles of various indidiuals in creating these problems," says the FM.

5.02 PM: By November 2019, new CEO started working intensively with RBI. It was clear there's no hope for fresh equity

5.02 PM: In September 2019, earlier promoter completely sold all his stake and left the bank. Genuinely attempts were made to get new equity, ut nothing materialised.

4.59 PM: In September 2018 RBI said leadership has to be changed, says the Finance Minister

4.56 PM: FM Sitharamam said that new YES Bank CEO appointed will be appointed on September 18. The process to clean up the bank started in 2018, she added.

4.56 PM: FM Sitharaman begins media interaction.

4.54 PM: RBI announces Scheme of Reconstruction for YES Bank.

4.53 PM: YES Bank crisis: Chidamabaram says govt's ability to run financial institutions exposed

Former P Chidambaram P Chidambaram hit out at the government on Friday, saying its "ability to govern and regulate financial institutions stands exposed". The comments came a day after YES Bank was placed under a moratorium, with the Reserve Bank of India (RBI) capping deposit withdrawals at the bank at Rs 50,000 per account for a month and superseding its board.

"BJP has been in power for six years. Their ability to govern and regulate financial institutions stands exposed. First, it was PMC Bank. Now it is YES Bank. Is the government concerned at all? Can it shirk its responsibility? Is there a third bank in the line?," Chidambaram said in a tweet.

(PTI)

4.30 PM: Finance Minister Nirmala Sitharaman to address the media in a short while from now.

Watch LIVE: Press conference by Finance Minister @nsitharaman

: 4:30 PM

: Conference Room 72, Ground floor, North Block

YouTube: https://t.co/99VZ2B6ahz

Facebook: https://t.co/imJr864fiT

PIB India (@PIB_India) March 6, 2020

4.26 PM: Don't panic, cash crunch at YES Bank ATMs to be resolved soon

Talking to reporters outside the Parliament, Finance Minister Nirmala Sitharaman said that YES Bank account-holders need not to panic as the RBI and government will make sure that there is no cash crunch at YES Bank ATMs.

4.20 PM: After Friday's volatile trading session, YES Bank ended 56 per cent lower at Rs 16.20 on BSE, after falling nearly 85 per cent lower to the all-time loss of Rs 5.55. Sensex tanked 893.99 points to end at 37,576.62.

4.13 PM: SEBI Chairman Ajay Tyagi called on Finance Minister Nirmala Sitharaman.

Shri Ajay Tyagi, Chairman of the Securities and Exchange Board of India (SEBI) calls on Smt @nsitharaman pic.twitter.com/j8HdbZWxF5

NSitharamanOffice (@nsitharamanoffc) March 6, 2020

3.23 PM: YES Bank founder and former MD Rana Kapur has refused to comment on the issues surrounding the private lender. "I have not been involved whatsoever with the bank for the past over 13 months...so, have no clue...," Kapur told BusinessToday.In.

3.11 PM: Chidambaram asks is it correct that SBI is "exploring investment opportunity" in YES Bank? "Why should SBI invest in YES Bank?" says the former FM.

SBI should take over the loan book of YES Bank for one rupee, recover the loans, and simultaneously assure the depositors that their money will be safe and will be returned.

P. Chidambaram (@PChidambaram_IN) March 6, 2020

2.41 PM: Will govt explain spike in lender's loan book under BJP's watch, asks Chidambaram. Earlier, Chidambaram slammed the Modi government, saying their (the Centre's) ability to govern and regulate financial institutions stood exposed.

:
FY2014: 55,000 FY2015: 75,000 FY2016: 98,000 FY2017: 1,32,000 FY2018: 2,03,000 FY2019: 2,41,000

P. Chidambaram (@PChidambaram_IN) March 6, 2020

2.28 PM: Arrest Rana Kapur: Asaduddin Owaisi

AIMIM Chief Asaduddin Owaisi demands the arrest of former MD and founder of Yes Bank, Rana Kapoor. Earlier, Congress leaders Rahul Gandhi and P Chidambaram had also slammed the Modi government for crisis in the banking sector.

2.25 PM: RBI curb on YES Bank credit negative: Moody's

The Reserve Bank on India's moratorium and withdrawal cap on YES Bank is credit negative, and the lack of coordinated action highlights continued uncertainty around bank resolutions, Moody's Investors Service. The RBI's moratorium on YES Bank is credit negative as it affects timely repayment of bank depositors and creditors, Moody's Investors Service Vice President Senior Credit Officer, Financial Institutions, Alka Anbarasu said.

2.10 PM: What's insurance cover for YES Bank customer?

In case if the private lender is dissolved, the maximum insurance cover that the depositors will receive is Rs 5 lakh for all accounts opened with the bank, including lockers. This is the first time in 27 years that insurance limit on bank deposits has been revised during Budget 2020 in February. The matter of hiking deposit insurance coverage came to the fore after Mumbai-headquartered Punjab and Maharashtra Co-operative Bank (PMC Bank) came under RBI scanner last year.

Also read: Now, you will get Rs 5 lakh if your bank goes bust instead of Rs 1 lakh

2.04 PM: YES Bank stock has no value for minority shareholders: ICICI Direct

"Like the large NCLT cases, a bailout involves bringing in fresh equity at extremely beaten down value (like 1-2) by the fresh buyer. Accordingly, minority shareholders will be reduced to a very small percentage stake from current large position. In all cases, minority shareholders are set to lose and recommend that existing shareholders exit positions. We rate the stock as Sell (from Reduce earlier)."

2.00 PM: HDFC Bank Chairman Deepak Parekh doesn't believe moratorium on YES Bank will last till April 3. "(I) believe market is overreacting, things will settle down in a week. The RBI has taken a timely call on YES Bank. If RBI invites us to take part in YES Bank capitalisation, we'll consider," he told to CNBC TV18.

1.41 PM: Breaking her silence on YES Bank crisis, Finance Minister Nirmala Sitharaman has assured YES Bank customers that each depositor's money is safe. "I'm in constant touch with RBI," she added.

Union Finance Minister Nirmala Sitharaman on #YesBank: I want to assure all the depositors that their money is safe, I am constantly in touch with the Reserve Bank of India (RBI). The steps that are taken are in the interest of the depositors, the bank & the economy. pic.twitter.com/t48fmk07vw

ANI (@ANI) March 6, 2020

1.31 PM: Kotak Mahindra Bank MD Uday Kotak says he's confident the action taken by the RBI will take care of the depositors' interests. "Will all work towards making sure there's enough confidence in the system," Kotak told CNBC TV 18.

1.23 PM: "No Yes Bank. Modi and his ideas have destroyed India's economy," says Congress leader Rahul Gandhi. Earlier today, Chidambaram also slammed the Modi government, saying their (the Modi government) ability to govern and regulate financial institutions stands exposed.

No Yes Bank.

Modi and his ideas have destroyed Indias economy.

#NoBank

Rahul Gandhi (@RahulGandhi) March 6, 2020

1.06 PM: What SBI chief Rajnish Kumar says on YES Bank 

SBI Chairman Rajnish Kumar, after meeting with Union Finance Minister Nirmala Sitharaman, said the state-owned lender had given "in-principle" approval of intent to invest in YES Bank. "Once RBI prepares its restructuring scheme, we will take a call," he said, adding that depositors' money was safe and that there was no need to panic. Both the Reserve Bank and State Bank have given assurance that people's money is safe.

12.58 PM: How can you withdraw up to Rs 5 lakh from YES Bank

YES Bank depositors can't withdraw more than Rs 50,000 for a month, but the RBI may allow YES Bank depositors to withdraw up to Rs 5 lakh in case of an 'emergency'. Those seeking more than Rs 5 lakh will have to submit a written request to Reserve Bank Administrator for YES Bank, Prashant Kumar, or the panel led by him.

12.48 PM: Customers a harried lot due to curbs on withdrawal

YES Bank customers are facing major issues while withdrawing cash from ATMs. They are also facing issues in accessing net banking as there has been a spike in the number of people trying to login its website. Besides ATMs and online banking withdrawals, YES Bank's UPI services have also been hit.

12.27 PM: What's the role of RBI administrator?

Reserve Bank has appointed Prashant Kumar as Administrator to look after the YES Bank revival process. In case of Yes Bank, his task is to first limit the bank withdrawals and get on to assessing the correct position of non-performing loans, the capital levels, the liquidity position and also the solvency issue. While the bank delayed the third quarter (Sept-Dec) results of FY20, the bank has provided the regulatory disclosure till September 2019. The position might have changed in the last five months (Oct to Feb).

12.14 PM: RBI Governor Shaktikanta Das on YES Bank

"We have issued two press statements yesterday. They explain in detail the background of our decision. It (the YES Bank revival process) will be done very swiftly, very fast. Thirty days which we have given is the outer limit. You'll soon see a scheme to revive YES Bank."

12.00 PM: YES Bank share tanks 85 %

YES Bank share price fell 84.93% to an all-time low on NSE today, trading as the top loser on Friday after Reserve Bank of India (RBI) superseded the private lender's board and restricted withdrawals for the customers. RBI later plans to put in place a revival scheme for the private lender.

11.35 AM: Is there a third bank in the line? Asks P Chidambaram

Chidambaram slams the Modi government, saying their (the Modi government) ability to govern and regulate financial institutions stands exposed. "First, it was PMC Bank. Now it is YES Bank. Is the government concerned at all? Can it shirk its responsibility? Is there a third bank in the line?"

BJP has been in power for six years. Their ability to govern and regulate financial institutions stands exposed

First, it was PMC Bank. Now it is YES Bank. Is the government concerned at all? Can it shirk its responsibility?

Is there a third bank in the line?

P. Chidambaram (@PChidambaram_IN) March 6, 2020

11.25 am: RBI will come with a scheme shortly, says governor Shaktikanta Das

The RBI governor Shaktikanta Das said on Thursday that the central bank is working on very swiftly and smoothly and RBI will come up with a scheme very shortly. "30 days is the outer limit. RBI is working very swiftly and smoothly and RBI will come up with a scheme very shortly," he said.

11.17 am: Yes Bank crisis: Brokerage firms cancel clients' withdrawal request

We have cancelled all fund withdrawal requests made by clients to their YES bank accounts so that the money doesn't get blocked. Please change, if your primary bank account is YES, to any other and withdraw the funds. https://t.co/p85cBc1SeZ

- Nithin Kamath (@Nithin0dha) March 5, 2020

11.10 am: Top finance ministry officials meet to discuss future roadmap

Top finance ministry officials' is underway to discuss future roadmap and course of action before Finance Minister Nirmala Sitharmaan meets SBI Chairman Rajnish Kumar

11.05 AM: Yes Bank share down 50 per cent on both the BSE and the NSE. The share opened at Rs 33.20 on Friday, and was trading at Rs 18.45 at 11 AM.

10.50 AM: Apart from SBI and LIC, the RBI may also rope in more banks to form a consortium of banks to revive YES Bank, suggest reports. Top RBI sources have said that the YES Bank issue will be resolved in just a month.

10.38 AM: Who can withdraw more than Rs 50,000

The apex bank has placed curbs on YES Bank customers for withdrawing money. As per the RBI directive, the depositors can't withdraw more than Rs 50,000 for a month starting from March 5 until April 3. However, people can still withdraw money up to Rs 5 lakh under certain "emergency" conditions like medical treatment, higher education; for paying obligatory expenses in connection with marriage or in case of any unavoidable emergency.

10.20 AM: YES Bank share nosedives

Shares of Yes Bank at Rs 27.65, down by 24.97%. Yes Bank was placed under moratorium by Reserve Bank of India (RBI)  and the withdrawal limit was capped at Rs 50,000, yesterday.

10.02 AM: The RBI took over of the YES Bank management has weakened sentiment in domestic market. Sensex has tanked 1,400 points, Nifty opens below 11,000; IndusInd Bank, SBI, Tata Steel top losers

9.54 AM: Top RBI sources say YES Bank issue will be sorted out in a few days. The RBI will act swiftly to put in place a revival scheme for the private lender.

9.47 AM: Does RBI cap applies to both current and savings accounts?

Yes. The RBI directive applies to both current and savings accounts, under which YES Bank customers can't withdraw more than Rs 50,000 in a month. The government, on RBI's recommendations, on Thursday imposed a moratorium on YES Bank from March 5 to April 3. This order came into effect from 6:00 pm today. The central bank has also superseded YES Bank's board.

9.38 AM: YES Bank share tanks 25 per cent in the opening session on Friday after opening lower than the previous day.

9.31 AM: What does RBI action on YES Bank say?

The RBI wants to investigate and do a full inspection under charge of an administrator. Prashant Kumar, former Deputy Managing Director and CFO of State Bank of India, has been appointed administrator by the RBI. Once the administrator inspects the book and prepares a report, the RBI will have a clear picture of asset quality of the bank. This will help the RBI take a decision on a merger with other bank or put more capital from public sector banks (PSBs) and other institutions.

Also read: RBI's board superseding points to graver issues at YES Bank

9.26 AM: What's RBI's plan of action on YES Bank

In other words, the RBI will assess YES Bank's books and asset quality to decide a plan of action, which might include merger or takeover by another entity, and implement this roadmap within the period of moratorium (30 days), "so that the depositors are not put to hardship for a long period of time".

9.11 AM: BSE and NSE have said that there'll be no futures and options (F&O) contracts in Yes Bank from May 29. In a worrying development for YES Bank customers, the RBI capped withdrawals by depositors at Rs 50,000. The central bank has also superseded the board of YES Bank and appointed Prashant Kumar, former Deputy Managing Director and CFO of State Bank of India, as administrator.

9.06 AM: ATMs run out of cash, online channels also not working

Harried Yes Bank depositors have been rushing to ATMs to withdraw cash since yesterday but are facing multitude of problems including closed down machines and long queues. Aggravating the problems of depositors were difficulties accessing the internet banking channel, which ensured that they can't transfer the funds online as well.

8.54 AM: RBI appoints former SBI CFO Prashant Kumar as administrator for Yes Bank

The RBI has imposed a moratorium on YES Bank, superseded its board, and imposed a withdrawal limit of Rs 50,000. The central bank said it was "satisfied that in order to protect the interest of the depositors and in public interest, it is necessary to issue certain directions to YES Bank". However, customers are bound to be affected directly.

8.52 AM: YES Bank ATMs run out of cash

A Yes Bank ATM in Parel runs out of cash as people rushed to withdraw money following Reserve Bank of India's (RBI) decision to place the bank under moratorium & cap withdrawal limit at Rs 50,000. -- ANI

8.50 AM:SBI board gives 'in principle' nod

The SBI board has given the largest lender an "in-principle" approval to invest in the capital-starved Yes Bank. The central board of SBI discussed the matter at a meeting on Thursday, it informed the exchanges. The announcement came hours after Yes Bank was placed under a moratorium, with the RBI capping deposit withdrawals at Rs 50,000 per account for a month and superseding its board. -- PTI

8.47 AM: How long is the cap on cash withdrawals?

The moratorium on YES Bank will be in place from March 5 to April 3, or a period of 30 days. The withdrawal limit for depositors may remain in effect for this period unless the RBI releases another notification.

Also read: YES Bank customer? Here's what you should do

8.44 AM: What did YES bank collapse?

The private lender had to the price due to issues such as deteriorating financial position, governance issues, false assurance on raising funds, non-serious investors, and outflow of liquidity.

Also read: Why did Yes Bank collapse? Here are 6 main reasons

8.38 AM: Are our savings safe from banks? asks AIMIM chief Asaduddin Owaisi

"First it was non banks like ILFS &  Dewan that collapsed under the weight of a crashing economy. Then a big cooperative bank in the rich state of Maharashtra, PMC Bank failed. Now we've the first ever scheduled commercial bank to fail: Yes Bank. Are our savings safe from banks?" asks Owaisi.

Mumbai: A Yes Bank ATM in Parel runs out of cash as people rushed to withdraw money following Reserve Bank of India's (RBI) decision to place the bank under moratorium & cap withdrawal limit at Rs 50,000. pic.twitter.com/IIID8Dz0lC

ANI (@ANI) March 6, 2020

8.35 AM: What can YES Bank customers do?

Customers have been affected due to the RBI cap on cash withdrawal from YES Bank. Currently, there's not much YES Bank customers can do beyond withdrawing up to Rs 50,000 from the bank and waiting for RBI's next announcement.

ALSO READ:Yes Bank withdrawal limit Rs 50,000 after RBI action

8.30 AM: Serious governance issues at YES Bank

The bank has also experienced serious governance issues and practices in recent years which have led to a steady decline of the bank. Take, for instance, the bank under-reported NPAs to the tune of Rs 3,277 crore in 2018-19. That was prompted RBI to dispatch R Gandhi, a former Deputy Governor, to the board of the bank. 

8.20 AM: What's YES Bank's financial position

The financial position of Yes Bank has undergone a steady decline over the last few years because of its inability to raise capital to address potential loan losses and resultant downgrades, triggering invocation of bond covenants by investors, and withdrawal of deposits. The bank was making losses and inadequate profits in the last four quarters.

8.15 AM: People's interest will be fully protected, says the RBI

The Reserve Bank has assured the depositors of YES 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."

8.12 AM: What the RBI says?

The Reserve Bank, in consultation with the central government, has superseded the Board of Directors of Yes Bank Ltd for a period of 30 days, owing to "serious deterioration" in the financial position of the Bank. "This has been done to quickly restore depositors' confidence in the bank, including by putting in place a scheme for reconstruction or amalgamation. Shri Prashant Kumar, ex-DMD and CFO of State Bank of India has been appointed as the administrator under Section 36ACA (2) of the Act."

8.06 AM: The Mumbai Police control room last night had sent an SOS alert to check on YES Bank ATMs across Mumbai, and control overcrowding and law and order situation.

8.01 AM: 'We're in trouble'

"We weren't informed. Wanted to withdraw cash but ATM run out of cash, as many withdrew. We're in trouble, Holi is coming," say customers.

First it was non banks like ILFS & Dewan that collapsed under the weight of a crashing economy

Then a big cooperative bank in the rich state of Maharashtra, PMC Bank failed

Now weve the first ever scheduled commercial bank to fail: Yes Bank

Are our savings safe from banks? https://t.co/GaS22OXaZE

Asaduddin Owaisi (@asadowaisi) March 6, 2020