Case Brief
The Reserve Bank said Yes Bank Ltd. had suffered a steady decline because it could not raise capital to absorb potential loan losses, leading to downgrades, invocation of bond covenants, deposit withdrawals, and broader governance concerns. RBI had tried to facilitate a market-led revival, but no credible revival plan emerged and the bank was facing regular liquidity outflows. In these circumstances, the RBI concluded there was no alternative but to seek a moratorium under section 45 of the Banking Regulation Act, 1949, and the Central Government imposed it effective immediately. The release also notes that RBI issued certain directions to the bank under section 35A of the Act.
Action Snapshot
- Primary Impact
- Business restriction
- Entity Type
- Bank
- Action Type