Yes Bank Crisis: Explained

                                        

                                                              credits: sawarajya.com                                                                

If you have shares of Yes bank or you have a bank account there then Maybe, you are in a panic mode You might not understand what to do how should I react at this time? so I will give you an overview that if you have invested in Yes bank or if you have a bank account there, what should you do why shouldn't you panic and how you can plan to get out of this situation.

Today, we are going to talk about Yes bank But before that another negative news came out That RBI is taking its control over Yes bank and said that they are going to control Yes bank now Because of which they said that if you have money in Yes bank then right now, you can withdraw only up to Rs. 50,000 per month Apart from this, there were a lot of people who had bought the share of Yes bank, when Yes bank was considered a very good growth story So a lot of people had the hope that it would bounce back because of which people continued to invest here and the situation today, if I talk about investors they are trying to figure out how they can sell their shares So first, I would like to give you a background on Yes bank Where did this growth story start from? And how this bank, which at one time was compared with HDFC was said that this bank in the coming time will become the second HDFC now, has reached the point of closing So first let us talk a little about the background Then we'll talk about your invested amount in Yes bank If you are thinking of getting out of it, or you are putting a lot of sell orders in the market and still your shares are not being sold.

                                  

                                                                         credits:zeenews

If we talk about Yes bank, it was one of the most preferred banks for investors to invest in and Yes bank started to show a lot of growth Rana Kapoor showed a very good growth story of Yes bank Because of which a lot of people started investing here Not only retail investors but a lot of mutual funds also invested here Because the bank gave very good returns Because of which this bank, at one time Reached the level of 400 But after that the news came out that this bank, is showing excessive growth and Invested a lot of its money in risky assets. Because if you lend your money Where there is a higher risk, you get higher returns, there you get a higher interest rate Because of which even Yes bank started investing in such assets In such corporate companies which were a little risky, But they gave higher returns and they showed more profits. If the investors saw higher profits More investors will invest here Because of which the share price started to go up. Apart from this, whenever a bank lends its money to someone It is very important for them to report their NPA (Non performing assets). If you have given your money somewhere and the chances for it to come back are very less, you have to book it as a loss and show it in your NPA, And at that time it happened that Yes bank started under reporting its NPAs. The news of which reached RBI and they said that when RBI looked into this they found out that Yes bank has under reported its NPA a lot Because of which there was a big problem here and Yes bank started to come down after this another news came out because of which Yes bank went down further And that news was that Rana Kapoor had to leave his MD position And in his place another MD will come, after which people's confidence started shaking And this bank's share at one time, came down a lot.

                                               

                                                                   credits: abhipedia

After him, the MD that came was Ravneet Gill He said that he was going to turn the bank around and bring it back to its golden days because of which Yes bank's share which at one time touched 140 That came back to the level of 200, because even then when the quarterly report of Yes bank came, they again reported a loss They said that their NPA is very high After which, this share came down further And as it came down, it reached the level of 50 or 60. After this Ravneet Gill said, that Yes bank is a bank and a bank has to take a lot of money to fulfill its liquidity needs After this Ravneet Gill said that Yes bank is going to take some money and he did a QIP as well. But because of that there was hope among the investors again that if Yes bank is still getting money Then it is possible that Yes bank will raise money again in the coming time And when Yes bank raises a good amount of money It will go back to its old days. It was just left as hope and Yes bank was unable to raise its money again.

This was about how Yes bank came down until now But now I will come to today, about which you might be very interested If your money is deposited here, what should you do? There are a lot of cases when you have gone on net banking and tried to remove the money But you weren't able to remove it In the same way, if you go to the bank, you must know that there is an upper cap that has been placed That from one bank account, in one month, you can only make a withdrawal of Rs 50,000 But if there is an extreme case here, if you have a health emergency Or if it is a matter of higher education then this cap increases from Rs 50,000 to 5 lakh, But we will assume that you cannot withdraw more than 50,000 in the current scenario. Then what should you do here? So I will compare this to another case of another bank which happened a months ago And that happened with PMC bank. The same thing happened with PMC bank that the liquidity concern increased a lot Because of which RBI superseded the board of directors of PMC and placed a moratorium and said that people will not be able to withdraw more than 50,000 So, the same thing happened in the case of Yes bank. But if you have deposited your money in Yes bank You can withdraw only Rs 50,000 in the current scenario in one month Apart from this, you must know that if you have made an FD somewhere On that RBI gives you an insurance Until some time ago, RBI gave you an insurance only until 1 lakh Which means that if the bank gets liquidated and is unable to pay you back Consider, that if you made an FD of 50 lakhs Your insurance was only of 1 lakhs But in the recent budget that amount was increased to 5 lakhs.

So, RBI is saying again and again that you have no reason to panic. The only reason that withdrawal limit has been placed now is That people don't panic because when there is a situation like this Retail investors like you and I, the common people They go to the bank and get their money withdrawn Because of which all the money leaves the bank. So, if there are any chances of the bank becoming stable again those chances get completely ruined. Even in the case of PMC the government initially put a limit But as the situation of the bank got better that limit was increased So, here even in the case of Yes bank, RBI has said that you have no reason to panic your money is safe in Yes bank. But currently, you can remove only until 50,000

Abhishek Rawat 

Content Writer

@DayLightMediA