business

Updated: Mar 06, 2020 11:31 IST

People have started queuing up outside the branches of Yes Bank as its ATMs have stopped functioning after the bank was placed under moratorium by the Reserve Bank of India (RBI).

“It was shocking that the RBI put a limit of Rs 50,000. I have tried to take out cash from ATMs but they were blocked by Yes Bank. NEFT transactions were also not taking place. I came here at 7 am to withdraw money,” Yogesh Sharma, a Yes Bank customer at Fort Branch in Mumbai told news agency ANI.

Yes Bank’s own net banking facilities have not been operational since Thursday evening. Other fintech operators who rely on Yes Bank to settle their transactions are also down. “We sincerely regret the long outage. Our partner bank (Yes Bank) was placed under moratorium by RBI. Entire team’s been working all night to get services back up asap (as soon as possible),” the app’s chief executive Sameer Nigam tweeted on Friday morning.

He added that the app hopes to be live in a “few hours”.

Yes Bank was placed under a moratorium Thursday evening, with the RBI capping deposit withdrawals at Rs 50,000 per account for a month and superseding its board. The RBI action came after the Rana Kapoor-promoted bank failed to raise capital to address potential loan losses.

The withdrawal limit, however, can be relaxed in case of medical emergencies, higher education and for expenses related to marriages, it said.

The taking over by RBI means Yes Bank will not be able to grant or renew any loan or advance, make any investment, incur any liability or agree to disburse any payment.

For the next one month, Yes Bank will led by the RBI-appointed administrator Prashant Kumar, an ex-chief financial officer of SBI.

The RBI action showed its impact on banking stocks. The NSE Nifty 50 index fell as much as 3.92 per cent on Friday to an over five-month low of 10,827.4 points, led by a 40 per cent slump in the shares of component Yes Bank. The broader BSE Sensex dropped as much as 3.79 per cent to 37,011.09.