New Delhi, March 14, 2020:
The government has notified that the moratorium period on YES Bank will be lifted on March 18 after the private bank’s reconstruction scheme comes into force.
The government has approved the proposal of the Reserve Bank of India (RBI), according to which the State Bank of India (SBI) will acquire 49 percent stake in YES Bank.
It may be mentioned here that YES Bank was placed under a moratorium period earlier this month with a Rs 50,000-limit on withdrawals from the bank till April 3. A gazette notification stated, “The order of moratorium on the reconstructed bank issued by the Government of India in the Ministry of Finance, Department of Financial Services vide notification number S.O. 993(E), dated the 5th March, 2020 shall cease to have effect on the third working day at 18:00 hours from the date of commencement of this Scheme.”
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The Ministry of Finance shared the gazette notification on Twitter. Finance Minister Nirmala Sitharaman said that there would be a three-year lock-in period for SBI investors who hold 100 shares or more in the private lender to the extent of 75 per cent of their holdings for all existing shareholders and those allotted to the investors under the reconstruction scheme.
Government issue Gazette notification following approval by Union Cabinet "Yes Bank Limited Reconstruction Scheme, 2020" yesterday.@nsitharamanoffc @RBI @DFS_India @PIB_India pic.twitter.com/wlGiD1FGX1
— Ministry of Finance 🇮🇳 #StayHome #StaySafe (@FinMinIndia) March 14, 2020
It needs mention here that YES Bank had been in news because of its crisis since the past year. Its Founder Rana Kapoor’s arrest had further pushed the Bank’s situation into uncertainty with its customers losing faith completely. The Yes Bank Founder is facing a case linked to the scam-hit DHFL as the loans lent by the bank to the company allegedly turned Non Performing Assets. An inquiry has also been set for a Rs. 600-crore worth loan extended by the DHFL to an entity.
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To add to the woes of its customers, Yes Bank was also unable to grant or renew any loan or advance, make any investment, incur any liability or agree to disburse any payment. However, with the government’s move to lift the moratorium period on March 18 will act as the balm to the panic-stricken customers of YES Bank.
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