NPA

Reading Time: 9 mins On 5th March 2020, the Reserve Bank of India (RBI) had imposed a 30-day moratorium on the YES Bank, superseded the bank’s board and appointed Prashant Kumar, who was serving as chief financial officer and deputy managing director at the State Bank of India (SBI) as an administrator. Under the moratorium, deposit withdrawals were capped at Rs.50,000 per person. The apex bank had also proposed a reconstruction plan under which the SBI shall take a maximum of 49% stake in the restructured capital of the bank. The YES Bank crisis is not unique or unprecedented as it came due to the growing number of bad loans caused by the issues faced by the country’s economy, which ranges from real estate to power and NBFCs. Thus, ensuring necessary reforms in the governance, policies, etc., to safeguard the country’s financial sector are a need of the hour.