Moratorium on withdrawals may go by Saturday: Prashant Kumar, Yes Bank Administrator

MUMBAI: Yes Bank administrator Prashant Kumar assured depositors that their money was safe and said the ₹50,000 limit on withdrawals could be lifted as early as the end of the week if the restructuring plan gets implemented by then.“It would be correct to say that the moratorium could be lifted by Saturday. We are working overnight to do this much before the RBI deadline,” he told ET. “Once the moratorium is lifted, normalcy will be restored. The outer date is April 3. I would like to assure all depositors: There is absolutely no need to worry or panic. Your deposits are absolutely safe. Our top priority is to make banking services seamless and hassle-free for our customers.”The lender has the backing of the Reserve Bank of India (RBI) and State Bank of India (SBI) to deal with any flight of deposits, he said. A former SBI chief financial officer, Kumar was appointed by the RBI after it superseded the Yes Bank board and imposed a 30-day moratorium on March 5 as part of a rescue plan led by SBI that was proposed the next day.Situation Under Control: Kumar“We have full support from the RBI as far as liquidity is concerned. There is no issue whatsoever,” he said. Clarity on liquidity support for Yes Bank will emerge in three-four days, after which the lender expects to lift the cap on withdrawals.He acknowledged that some depositors may choose to take their money elsewhere.“Flight of deposits is expected. I don’t envisage a situation where this won’t happen,” Kumar said. “But since State Bank of India has already agreed to be the equity partner, its brand name will stem the deposit flow. Also, in the next three to four days more clarity is expected to come on the capital side as well from the RBI.”Kumar said the situation was under control after panic last week, when long queues were seen outside Yes Bank ATMs with customers unable to withdraw cash.“I acknowledge that customers have faced hassles, but not a single unpleasant incident happened at any of our branch or ATMs. After the initial hiccup, our customers are also responding very well to the situation,” Kumar said. “My staff is very responsive. They have been working day and night to smoothen customer interface. The ATMs were up and running on the first day itself. On Saturday, ATMs of other banks were also accessible to our customers. I’m getting very good feedback from the customers. Today, we didn’t even find rush in our branches, so it is normalising very quickly.”He also rejected speculation over a possible merger and said Yes Bank will remain a separate entity.“There is no question of a merger. I don’t think that will happen,” Kumar said. “SBI has said publicly that it will invest 49%, we are also in discussions with other investors which is being led by SBI. I am confident that in a couple of days the issue about the capital requirement would be taken care of, but the whole understanding and the clarity would come in the next couple of days along with our declaration of the December quarter results.”Third-quarter earnings are due to be announced on March 14. The new board will be announced when the moratorium is lifted.“The day the moratorium is lifted, there will be a notification through which the board will be reconstituted. Once the new board is in, it will meet and decide the future course of action,” he said. “I have been communicating directly to both customers and employees, messages and emails were sent from my desk on the first day of my coming in.”Kumar said he couldn’t comment on what his role would once the SBI plan was implemented. “As far as my role is concerned, you will have to ask the RBI,” he said. SBI’s participation meant that there was no risk to depositors.“We will also reach out to the customers to assure them that nothing untoward will happen to their monies. They are dealing with a much-better-governed Yes Bank now,” he said. “This bank now has the backing of SBI. I firmly believe that our customers will understand that and keep their deposits and businesses with our bank.”

from Economic Times https://ift.tt/2wHev60