india

Updated: Mar 05, 2020 23:12 IST

Crisis-ridden private banking company Yes Bank’s online banking website became non-functional within hours of a Reserve Bank of India notification putting a cap of Rs 50,000 on withdrawals from the bank till April 3, 2020, came into effect at 6pm on Thursday.

The website said the disruption was due to “heavy traffic”, however, it was not clear if the RBI imposed withdrawal limit was the real reason.

“Dear Customer, due to heavy traffic on our NetBanking, we are temporarily unable to process your request. Please try again later or use the YES mobile app to carry out your transactions,” the message flashed on the bank’s online banking page said.

Account holder in the bank said they were unable to withdraw money from ATMs as well.

“Dear customer, your magstripe debit card has been stopped as per RBI direction,” the message flashed on the Yes Bank ATM kiosk.

The Reserve Bank of India has, however, said that it would soon find a solution to the present financial crisis faced by the bank by exploring a plan for the bank’s reconstruction or amalgamation, which it hoped to finalise well before the period of moratorium ends. The moratorium came into effect at 6 pm on Thursday.

The notification said, the financial position of Yes Bank Ltd. (the bank) has undergone steady decline largely due to “inability” of the bank to raise capital to address potential loan losses and resultant loan downgrades.

Assigning further reasons for the decline, the notice says the bank has also faced “serious governance issues’ and practices in the recent years.

The crisis has triggered withdrawal of deposits from the bank, it added.

The RBI has been in constant touch with the bank management to find ways to improve its financial condition. The notice said that several private investors who had shown interest backed out after holding discussions with the RBI.

The RBI notification says that the RBI had “no alternative” but to apply to the central government for imposing a moratorium under section 45 of the Banking Regulation Act, 1949.

The Board of Directors of Yes Bank Ltd has also been superseded for a period of 30 days and Prashant Kumar, ex-senior official of the State Bank of India has been appointed as the administrator.