Indian Export Body To Urge RBI To Shift Yes Bank Nostro Account To Other Banks
Account holders gather outside Yes Bank to withdraw money, in Thane. (Source: PTI)

Indian Export Body To Urge RBI To Shift Yes Bank Nostro Account To Other Banks

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With the Reserve Bank of India imposing a moratorium on Yes Bank Ltd., exporters' body Federation Of Indian Export Organisations on Monday said it will urge the central bank to allow to shift all outstanding foreign currency payments and receipts of exporters to their Nostro account with other banks.

"We are taking up with the Reserve Bank of India that payment pending in Nostro account of Yes Bank or to be received as inward remittance or for documents sent on collection now should be sent to Nostro of exporters' account with other bank or credited to exporters account but withdrawal to be allowed," FIEO Director General Ajay Sahai told PTI.

Nostro accounts are used to facilitate international transactions and to settle transactions that hedge exchange rate risk. The Reserve Bank of India on March 5 imposed a moratorium on capital-starved Yes Bank, capping withdrawals at Rs 50,000 per account and superseding its board with an immediate effect.

The RBI's action came after the banking regulator found out risky credit culture and serious governance issues at Yes Bank. Following this, the country's largest lender State Bank of India on Saturday said it will invest Rs 2,450 crore in the troubled private sector bank against 245 crore shares.

Also read: Yes Bank Scam: CBI Carries Out Searches At Seven Locations

Separately, the Gems and Jewellery Export Promotion Council has also said that in view of the recent action taken by the RBI on Yes Bank, all exhibitors and visitors are advised not to deposit any cheques/NEFT/RTGS/IMP in that bank with immediate effect.

"GJEPC may not be able to provide credit for cheque's deposited in Yes Bank after March 5, 2020, in view of the restrictions imposed on transaction with Yes Bank," it added.

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