There is already a slowdown in the market, all the global markets are falling down and in that the news comes that RBI will take full control of Yes Bank. At one time Yes Bank one of the best banks and compared with big banks of India and No 5 public sector bank in India. Investors had complete trust in this bank, and a lot of stock advisors had recommended this stock and mutual funds had also invested in it.
If seen, by 2018 the stock price of this bank had gone up to Rs.395. Due to the rising stock prices and thinks as good management, People started trusting this bank, and it seemed that after some time, the stock price will come back again but it did not happen.
Yesterday, a crowd appeared in the banks to withdraw money. And investors were also having trouble selling stocks.
The RBI has imposed a bond on the bank keeping in mind the Depositors Under Section 45 of the Banking Regulation Act, 1979. Now you can withdraw 50,000 rupees from the bank in a month, and 5,00,000 rupees for an emergency. Now Yes Bank will not be able to give lone to anyone and not will be able to invest somewhere.
NPA’s Of Yes Bank And Crisis:
A lot of gossips was seen in Yes bank NPA. The bank’s profit in Q3FY19 was ₹ 1001 crores and the gross NPA was 2.1 which was not good but was fine. But in Q2FY20 the bank reported a loss of ₹600 crores and the NPA went up to 7.4.
Yes Bank had kept NPA hidden for a long time, due to which the profit growth reported good in the last few years. But when all the NPAs came to the front, there was a glitch in the bank’s NPA. Due to this, investors started taking off money. And due to the financials being weak, due to the governance issue and they kept telling the investors and the customer we have a good plan so that the bank will come in good condition, but it could not be proved. This was the main reason that led to the bank collapse.
An assurance scheme was issued, whenever the bank will closed, you can get up to till ₹ 5 lakh on your deposits, so the money of the depositors will be safe. That means if 5 lakh or more than 5 lakh money in the bank and if due to the bank Crisis bank closes, then the depositors can get ₹ 5 lakh but not more than 5 lakh Rupees. This act comes under the underact deposit insurance and credit trust under the crop act 1971.
Due to this crisis, the stock investors have suffered a lot of losses, the management was quite saying that we will come back to good positions and the new CEO was also assuring that we will get a good position and will come back like before but it did not happen. When the news came that the RBI will take full control of yes bank and the NPA reports also did not come good, due to which YESBANK stocks came down and investors suffered a lot of loss.