Are you a Yes Bank account holder? Here's how the crisis will impact you

• On March 6, the Reserve Bank of India (RBI) issued a moratorium that caps the withdrawal limit for customers to ₹50,000 until April 3, 2020.
  
• The customers who are liable to pay back loans to YES Bank may face difficulty. In this case, the bank will first debit the customer’s account for a sum that is to be paid as EMI.
  
• There is a relaxation for customers in case of any medical emergencies, wedding or higher education fee — where the customers can withdraw a higher sum amounting to ₹5 lakh.

Amid the financial troubles of Yes Bank, the Reserve Bank of India (RBI) issued a moratorium that caps the withdrawal limit for customers to ₹50,000 until April 3, 2020.

Yes Bank is the fourth largest private sector bank in India with over ₹3.45 lakh crore assets and a deposit base of more than ₹2 lakh crore.

However, its customers can only withdraw a maximum of ₹50,000 for the next one month from both savings or current accounts. Even if a customer has multiple deposit accounts in the bank, the withdrawal limit remains the same.

EMI will be auto debited by the bank

The customers who are liable to pay back loans to YES Bank however may face difficulty. In this case, the bank will debit the customer’s account for a sum that is to be paid as EMI. And the remaining amount can be used for withdrawals.

Salary accounts can be transferred

If customers have to pay systematic investment plans (SIPs) in mutual funds from the Yes Bank account, they can look up to the mutual fund houses, who are working to ensure the flow of money.

While the RBI is working on a restructuring plan, other banks like Kotak Mahindra Bank have started processing redemption requests to help out the customers access their funds.


But to be on the safer side, the bank customers can ask their employers to transfer their salaried accounts to other banks and seek an extension of deadline from the lenders, if any — until RBI arrives at a conclusion.

Interim bailout by RBI is in the works

However, if you’re a Yes Bank customer, there is no need to fret about your monthly installments, utility bills, investments and salary account. The apex bank is considering all options, including an interim bailout to save Yes Bank.

The ‘moratorium’ is being implemented only for a month while the central government figures out a solution. “We naturally have a market-based resolution of the problem. A bank-led or investor-led resolution of a problem is preferable,” Shaktikanta Das, Governor of RBI told reporters.

According to him, the one-month time limit will be more than enough for RBI to implement its plan. “It will be done very swiftly, it will be done very fast. 30 days, which we have given, is the outer limit,” he said.

Medical emergencies, education fee and weddings will be exempted

In addition to this, there is a relaxation for customers in case of any medical emergencies, marriage or higher education fee. The apex bank said that in case of such emergencies, the customers can withdraw a higher sum amounting to ₹5 lakh.

In case of a total shutdown, deposits of up to ₹5 lakh are guaranteed under the Deposit Insurance and Credit Guarantee Corporation (DICGC). However, this is not applicable to Yes Bank right away as it is under the moratorium, which has restructuring plans in the works. The deposit scheme is like insurance for customers, in case the bank is completely closed down.

See also:
Yes Bank share price falls 25% after RBI limits withdrawals

SBI statement on proposed Yes Bank bailout is far from reassuring

In the Yes Bank crisis, one chart shows how rumours were used to trap small investors