Customers Sensed The Yes Bank Crisis Coming, Withdrew Cash In Anticipation
Police officers sit outside a Yes Bank Ltd. branch in Mumbai, India, on Friday, March 6, 2020. (Photographer: Dhiraj Singh/Bloomberg)  

Customers Sensed The Yes Bank Crisis Coming, Withdrew Cash In Anticipation

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Customers of Yes Bank Ltd. foresaw the ongoing crisis at the lender last year itself.

The private sector bank witnessed a steady decline in deposits last year as customers withdrew over Rs 18,100 crore from their accounts between March and September.

The Reserve Bank of India, while placing Yes Bank under a moratorium on Thursday, capped withdrawals at Rs 50,000 per account for the ongoing month. State Bank of India is now leading a Rs 2,450-crore rescue plan to revive the lender.

Accordind to data in Yes Bank’s quarterly results, Yes Bank had Rs 2,27,610 crore in deposits at the end of March 2019. That fell to Rs 2,25,902 crore by the end of June and Rs 2,09,497 crore by the end of September. The difference in deposits between March 2019 and September 2019 shows withdrawals worth Rs 18,110 crore.

Data beyond September is not available as Yes Bank is yet to report its third-quarter results.

A Delhi-based customer said that he sensed that all was not good with the private bank and withdrew all of his deposits, except the minimum balance required to keep the account active. "We kept hearing that there was some problem, therefore we took out our money well before the withdrawal restriction was imposed on the bank," he said on the condition of anonymity.

Another customer said he had limited deposits in Yes Bank and was not really worried much as the insurance amount has now been raised to Rs 5 lakh.

"Even as I could withdrew Rs 50,000 through cheque, I am not really worrying much as my account has limited cash. Also, since the deposit insurance now covers up to Rs 5 lakh from Rs 1 lakh earlier, there was not much problem for me," Lalit Kumar, a Delhi-based Yes Bank customer, told Press Trust of India.

A couple of other customers that PTI spoke with echoed similar sentiments.

But a female customer reposed confidence in Yes Bank and said the government and the Reserve Bank of India have swung into action and there was no need to worry.

Also Read: Yes Bank Crisis: RBI’s Trysts With Large Private Bank Failures

Yes Bank has assured customers that their money is safe with the bank during the RBI-imposed moratorium, and that they can withdraw up to the permitted Rs 50,000 from ATMs as well as bank branches.

Also Read: Yes Bank: Missing Pieces Of The Puzzle

Despite that, long queues have formed outside Yes Bank outlets across the country since the moratorium came into effect Thursday. As of March 2019, the lender had 1,120 branches and 1,450 ATMs across India.

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