New Delhi: The inconvenience and uncertainty faced by Yes Bank depositors may be short-lived as State Bank of India (SBI) chairman Rajnish Kumar has said the moratorium could be lifted within a week.
Assuring depositors of the safety of their hard-earned money, 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. His statement gains significance as both depositors and investors are concerned about the bank's future and capital adequacy.
As per the Reserve Bank of India (RBI) draft reconstruction scheme for the crisis-hit private lender, the SBI will take up 49 percent 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. The SBI Chairman also said he didn't receive any direction from the government and the bank was closely working with the apex bank. 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. The RBI last week also superseded Yes Bank's board of directors and appointed former SBI CFO Prashant Kumar as administrator.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 percent before completion of three years from the date of the infusion of the capital.