Moratorium to be on lifted March 18

Reserve Bank Governor Shaktikanta Das on Monday assured that crippled Yes Bank has enough funds to meet any requirements and promised that the central bank will step in with additional liquidity support if needed.

The assurance comes at a time when there is a worry that once the moratorium is lifted on March 18 evening, there can be a run on the bank, putting more liquidity pressure.

“I would like to mention that Yes Bank has enough liquidity to meet any requirement. If there is a requirement, the RBI will provide necessary liquidity support” Das told reporters and also announced that after 6 pm on March 18, depositors can take their money out without any restrictions. The bank’s deposit base eroded by Rs 72,000 crore to Rs 1.37 lakh crore as of March 5, 2020 as against Rs 2.09 lakh crore as of December 31, 2019, according to data shared by the bank last Friday while announcing the Q3 earnings.

Under the reconstruction scheme, which the governor said is progressing as planned, the private lender has received over Rs 10,000 crore from eight financial institutions, including Rs 6,050 crore from SBI.

ICICI Bank and HDFC (Rs 1,000 crore each) Axis Bank (Rs 600 crore), Kotak Mahindra Bank (Rs 500 crore), Bandhan Bank, Federal Bank (Rs 300 crore each) and IDFC First (Rs 250 crore) also joined the SBI-led consortium and invested in Yes Bank.

The Government notified the Yes Bank reconstruction scheme late last Friday. With that, the moratorium on the bank will be lifted by March 18.

The RBI on March 5 put clamped a moratorium on Yes Bank, capping withdrawals to Rs 50,000 per depositor till April 3. This was done according to deputy Governor NS Vishwanathan, was required under section 45 of the Banking Regulation Act that requires a moratorium as a pre-condition for drawing up a revamp scheme.