A day after the Reserve Bank of India (RBI) superseded the YES Bank Board of Directors for 30 days, the troubled private sector lender saw a sharp downturn on Friday as its shares crashed 85 per cent.

The RBI on Thursday evening superseded the board of YES Bank and put curbs on its operations till April 3, imposing a withdrawal limit of Rs 50,000, owing to serious deterioration in the financial position of the bank.

Addressing media on the YES Bank crisis, RBI Governor Shaktikanta Das said the Central bank took the step after it found that the private sector lender’s efforts were not working out.

He said the decision with respect to YES Bank was taken not only to deal with the problem in individual entity but also to maintain the resilience of the Indian financial sector.

Das further said the RBI is ready to deal with the challenges of the move very effectively’ and added that “very swift action” will be seen from the Central bank to revive YES Bank.

“The 30 days which we have given is the outer limit, you will see very swift action from the RBI to put in place a scheme to revive YES Bank,” Shaktikanta Das told reporters.

“A market-based resolution of the problem, a bank laid, investor laid resolution of the problem is always preferable,” he said and added: “You have to give time to the bank, management to take the steps they need to take and they tried. RBI intervened when we found it was not working out.”

Meanwhile, Chief Economic Advisor Krishnamurthy Subramanian on Friday assured all depositors of YES Bank that their funds will remain safe and there is no need to panic.

The RBI has appointed former SBI chief financial officer Prashant Kumar as administrator for YES Bank.

In line with the provisions of the Banking Regulation Act, the RBI 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 (30 days) ends so that the depositors are not put to hardship for a long period of time.

The Reserve Bank has also issued certain directions to the bank under section 35A of the Act.

“In exercise of the powers conferred under 36ACA of the Banking Regulation Act 1949, the Reserve Bank has in consultation with the Central government, superseded the Board of Directors of Yes Bank Ltd for a period of 30 days owing to serious deterioration in the financial position of the bank.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.”