Finally the moratorium on Yes Bank, which started in the evening on March 5 with a condition to withdraw only up to Rs 50,000 per person, will end at 6 pm on March 18, much before the earlier scheduled date of April 6, 2020. All operations will resume as usual from tomorrow evening.
The moratorium on Yes Bank will finally be lifted on March 18 at 6 pm, Reserve Bank of India (RBI) Governor Shaktikanta Das said in the press conference on March 16.
All operations will resume as usual from tomorrow evening and the new board will assume the position on March 26.
While addressing a press conference, Prashant Kumar, new MD and CEO of Yes Bank, said, all ATMs were full of cash and there was absolutely no issue on liquidity side from the bank.
"We would appeal to customers that there is no need to worry about the safety of deposits. Only one-third of our customers have withdrawn Rs 50,000 during the moratorium. In fact, customers’ feedback is that they don't feel the need to withdraw money from the bank and we had higher inflows than outflows in the last few days," he added.
After taking the charge as MD and CEO, the main task for Prashant Kumar now would be to retain depositors and bring back the ones who departed from the bank, even though RBI governor Shaktikanta Das and Rajnish Kumar of SBI have asserted that depositors should not worry about their money.
"RBI and SBI have given all assurance to depositors. But the job of Prashant Kumar looks difficult in terms of bringing deposits back which departed after the moratorium. I feel most of depositors might have gone to SBI, HDFC Bank, ICICI Bank or some other banks," JN Gupta, Former ED, SEBI told CNBC-TV18.
"The work culture of Yes Bank is professional. Hence, bringing back trust of depositors is important, though it is little bit easier due to brand image developed over the period of times," he said.
Experts have lauded both SBI and RBI for their efforts in saving the troubled bank.
"In the Indian history, the first time this kind of experiment has been seen to save the bank and the full credit goes to RBI and State Bank of India for their wholehearted efforts to reassure Yes Bank depositors. If this model works well and there is no more cash withdrawal, then it will be new kind of situation and deposits will stick to it," Dipan Mehta of Elixir Equities said.
"There are a lot of challenges in terms of shifting a bank process, but I hope everything will work smoothly," he added.
The SBI-led consortium of banks will collectively provide Rs 10,000 crore to keep Yes Bank afloat.
State Bank of India will invest Rs 6,050 crore against 605 shares of Rs 10 each, while ICICI Bank, HDFC, Kotak Mahindra Bank, Axis Bank, Bandhan Bank, Federal Bank and IDFC First Bank will pour in Rs 3,950 crore in the cash-starved private sector lender.
According to experts, Prashant Kumar will not only have to win back customers but also bring in fresh foreign investment.
"The rally in share price clearly reflected the news. Now the next trigger for the bank would be to bring foreign interest back, through QIP or any other instrument," Prakash Diwan, Market Expert told CNBC-TV18.
Yes Bank shares rallied 134 percent in last three consecutive sessions to close at Rs 58.65 on March 17. It has rallied 957 percent from its record low of Rs 5.55 touched on March 6.