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Yes Bank’s moratorium may end within a week, says SBI Chief

His statement gains significance as both depositors and investors are concerned about the bank’s future and capital adequacy.

Yes Bank’s moratorium may end within a week, says SBI Chief

Kumar said once the state-run lender stepped in there shouldn't be any worry about money as the financial system was sound. (Photo: IANS)

The inconvenience and uncertainty faced by Yes Bank depositors may be short-lived as the moratorium could be lifted within a week, said the State Bank of India (SBI) Chairman Rajnish Kumar.

Kumar’s statement comes a day after Chief Economic Adviser (CEA) Krishnamurthy Subramanian said there was no reason to worry as Indian banks had adequate capital.

Kumar said once the state-run lender stepped in there shouldn’t be any worry about money as the financial system was sound, according to media reports. It would be business as usual for Yes Bank with SBI’s entry, Kumar assured depositors.

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His statement gains significance as both depositors and investors are concerned about the bank’s future and capital adequacy.

Earlier, the RBI-appointed administrator Prashant Kumar, has also said efforts are on to lift the moratorium before the April 3 deadline and it could be lifted as early as Saturday. According to the administrator, there should not be any issue on the liquidity front.

“We are working out a fast resolution mechanism and the moratorium might be lifted as early as Saturday. SBI needs to put in the money first and then the moratorium would end,” said Prashant.

As per the Reserve Bank of India (RBI) draft reconstruction scheme for the crisis-hit private lender, the SBI will take up 49 per cent in the bank by investing Rs 2,450 crore. On Thursday, the RBI placed Yes Bank under moratorium and capped the withdrawal limit at Rs 50,000 till April 3.

Kumar also said he didn’t receive any direction from the government and the SBI was closely working with the RBI.

Last week, the central bank also superseded Yes Bank’s board of directors and appointed former SBI CFO Prashant Kumar as administrator.

The new board of directors will stand constituted from the appointed date. It will comprise a CEO and MD, non-executive chairman and non-executive directors. The SBI will have nominee directors appointed on the board of the reconstructed bank.

The RBI may appoint additional directors to the board, who shall continue in office for one year, or until an alternate board is constituted by Yes Bank.

The SBI will not reduce its holding below 26 per cent before completion of three years from the date of infusion of the capital.

(With input from agencies)

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