As Yes Bank reworked its systems to meet the Rs 50,000 withdrawal cap, usage of debit and credit cards, ATMs and online transactions were disrupted.

Yes Bank crisis Account holders rush to branches across India after moratorium
Money Yes Bank Friday, March 06, 2020 - 19:24

After the government put a moratorium on Yes Bank, its depositors were left in a tizzy with them not being able to access their funds. While the Reserve Bank of India put a withdrawal cap of Rs 50,000 per account holder until April 3, depositors were not able to use their debit card, make payments online or even transfer funds on Thursday and Friday, even within the Rs 50,000 limit.

Panicking over the servers of the bank being down, account holders lined up at ATMs on Thursday night and at the bank on Friday. Across the country, Yes Bank’s bank branches were crowded.

Outside the Fort, Mumbai branch of Yes Bank, around 50-60 account holders were lined up. However, there was no chaos seen at the time.

“Yes Bank is my salary account and what I use for everything. We had an idea that the bank wasn’t doing well but didn’t think it would come to this. Holi is around the corner and I have EMIs to pay as well. I just hope I don’t get fined for any late payment,” said Nivedita, who works for a small finance firm.

The Worli branch too, had customers lined up outside to withdraw money.

In Bengaluru too, the Kasturba Road branch saw many account holders coming to withdraw their money from the bank.

Read: Yes Bank account holder? Here’s all you need to know  

Manjunath J, an employee with a tech company said, “My salary account for the last 4 years has been with Yes Bank, and I was keeping some of my saving here. Now we hear that things will be normal in a week's time but how can we trust the government? The PNC bank had similarly gone, so I am moving my money to SBI.”

The Rs 50,000 cap also affected several businesses and traders who had their business accounts with Yes Bank. A trader standing outside the Fort branch said that he had a pending GST payment of nearly Rs 1.5 lakh and if he didn’t pay, he would be fined for it. And the Rs 50,000 limit does him no good, he added.

At the YES bank branch at Somajiguda in Hyderabad, a person who identified himself as Lal running an interior design firm said, "I have seven employees and their salaries are stuck in my business account. I’m unable to withdraw or move the money, what do I tell my employees? The RBI should have waited for a week more before setting such restrictions on public.”

While all depositors were able to withdraw their money from the branch, depositors have been facing immense difficulties, especially given the penetration of online payments today.

One visibly agitated customer outside the bank in Mumbai said that he wasn’t able to use his card or even pay for anything online. “Coming to the bank on a working day in a big hassle. I had to take half a day off to do this. Why do I have to suffer for a bank that didn’t do its job?” he said.

BloombergQuint report quotes a senior official as saying that Yes Bank is reworking its systems to meet the Rs 50,000 withdrawal cap. This reworking is what has caused disruption in usage of cards, ATMs and online transactions. The senior official told BQ that they will start working once its systems are recalibrated.

Some online payment services, which had Yes Bank as their merchant bank also faced disruption in services. PhonePe for example has been down since Thursday night.

Also read: PhonePe services hit after Yes Bank put under moratorium by RBI

For now, the RBI has announced a draft resolution plan where it has said that SBI has agreed to invest equity into the bank in return for a 49% stake in Yes Bank. The final resolution plan will be put in place in the next 30 days.

Also read: What led to the downfall of Yes Bank? The tendency to say yes to all lending

With inputs from Soumya Chatterjee, Mithun MK and Anjana Shekar

 

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