YES Bank Crisis 2020: Rana Kapoor& Raghuram Rajan Reaction

YES BANK CRISIS: Rana Kapoor, the co-founder of Yes Bank, has blamed the new management for the failure of the private sector Bank.

A special court on March 11 extended the (ED) Enforcement Directorate custody of Kapoor, who was arrested on charges of money laundering, until March 16.

Rana Kapoor also said that he was in touch with the Reserve Bank of India.

YES BANK CRISIS 2020

Contents

All About YES BANK Crisis 2020

YES Bank is India’s 5th largest private Sector Bank. YES Bank, has come under the Reserve Bank of India (RBI) action for mounting bad loans.

On March 5, 2020, the Reserve Bank of India (RBI) announced that it was suspending the board of directors of YES Bank for a period of 30 days.

RESERVE BANK OF INDIA HAS TAKEN VARIOUS STEPS TO SAVE YES BANK CRISIS:

  • Reserve Bank of India (RBI) has taken YES Bank’s Management to under it.
  • It has imposed a moratorium whose cash withdrawal limit has been capped at Rs. 50,000.
  • RBI used the instrument of Moral Suasion on the SBI to acquire the YES Bank. Moral Suasion implies compulsion or informal suggestion by the Reserve Bank of India on Commercial banks for the Condition of Credit Policies.
  • Moral Suasion: Quantity Control Method of Reserve Bank of India.
  • Reserve Bank of India announced a draft “Scheme of Reconstruction” that entails the State Bank of India (SBI) investing capital to acquire a 49% stake in the restructured private lender.

Reason Why YES Bank Crisis Happened

Domino Effect of Infrastructure Leasing & Financial Services:

  • The YES Bank illustrates the widening damage to India’s Shadow Banking Crisis. It has left the YES bank with a growing pile of bad loan situation.
  • YES, Bank’s total exposure to IL & FS and Dewan Housing Finance Corp (DHFL) was 11.5% in the month of September 2019.

Rising Non-Performing Asset (NPAs):

  1. YES Bank Suffered a dramatic doubling in gross non-performing assets.
  2. Due to NPAs Bank was unable to raise capital to shore up its balance sheet.

Vicious Cycle:

  1. The decline in the financial position of YES Bank has triggered the invocation of the bond covenant by investors & the withdrawal of deposits of Bank.
  2. The Bank was facing a regular outflow of liquidity. It means that the bank was witnessing the withdrawal of deposits from customers’ accounts.

Governance Issues:

  • YES, Bank has also experienced serious governance issues & practices in recent years.

The reaction of Raghuram Rajan on Yes Bank Crisis

There was enough time to put together a plan for Yes Bank, says Raghuram Rajan

Rajan, who completed his 3-year term at the RBI in 2016, says that he has been saying for a long time now that there is a need to clean up the financial sector quickly and in a resolute way so that the country can move forward.

YES BANK CRISIS

Queries & Their Solution to know about the YES bank Crisis: or Frequently asked Questions:

What is the full form of YES Bank?

Ans: Youth Enterprise Scheme Bank.

Who is the Owner of YES Bank?

Ans: YES Bank is a private sector bank, founded by Rana Kapoor & Ashok Kapoor in 2004.

What is the tagline of YES Bank?

Ans: Experience Our Expertise.

What is the minimum balance in YES Bank?

Ans: Minimum Balance requirement is Rs. 10,000.

Can Customer Withdrawal Money from YES Bank’s Account?

Ans: Customers can withdraw a total of Rs. 50,000 during the moratorium period.

Are the YES Bank’s ATMs Functioning?

Ans: Yes, Bank’s ATMs are functioning.

Can Customer use YES Bank’s Debit card at other Bank’s ATMs?

Ans: Yes, Customers can use Debit cards both at YES Bank & Other Bank’s ATMs.

Can Customers make payments towards YES Bank Credit card EMIs & loans?

Ans: Yes, inward IMPS/NEFT & RTGS services are enabled.

 Can Customer Transfer funds from one YES Bank to another?

Ans: Transfer from one account to another is allowed, however, customers can withdraw INR 50,000 form all these accounts till April 3rd,2020.

If a customer holds a current account with YES Bank & have to Pay Salaries to his employees. Can he withdraw more than INR 50,000?

Ans: Yes, Bank’s Current account can be debited more than INR 50,000.

Customers are allowed to Operate Locker Facilities?

Ans: yes, they Will Operate.

Customer allowed to raise a stop payment request?

Ans: Yes, he will be able to stop payment.

What will happen to the cheque that a customer written & issued to clients?

Ans: All clearing activities are suspended Currently.

Is the Rs. 50,000 limits at Customer ID Level or at the Account level?

Ans: At Customer ID Level.

Is FD safe in YES Bank?

Ans: Yes, it is quite safe

Is YES Bank Nationalized Bank?

Ans: No, YES Bank is not a Nationalized Bank it is a private bank.

Can Customer close the YES Bank account online?

Ans: No, Customer has to visit the branch to close the account.

How Can Customer can download YES Bank Statement?

Ans: Log into the YES Bank Internet Banking account. Click on the account number. The customer gets the option of generating an account statement.

What is YES Bank Customer ID?

Ans: The Customer ID is mentioned in the welcome kit delivered to the customer once he opens an account with YES Bank.

How Many Digits are there in YES Bank account Number?

Ans: Account number digits -> 15

What is F&O ban?

Ans: The idea of the stocks ban in F&O is to prevent excessive speculative activity. The stock exchange imposes an F&O ban when the aggregate open interest of a stock crosses 95% of the market-wide position limit.

What are the Products of YES Bank?

Ans: YES Bank Business Loan, YES Bank Car Loan, YES Bank Debit card, YES Bank Credit Card, YES Bank FD Rates, YES Bank Gold Loan, YES Bank Home loan, etc.

These are some Queries & Solutions related to Current Events or Issues. Users can also check all the information regarding the Current Events from Official notification of Government schemes Portal. It is the most expected and important topic in GK Sections in Latest Govt. exams & Upcoming Government Exams 2020.

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Last Updated: July 7,2020 12:00:28 AM

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