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Yes Bank

Yes Bank
Yes Bank
On the Yes Bank crisis, the government on Friday assured that people's deposits.  Money is safe, but restlessness was seen in bank account holders throughout the day.  At the same time, due to the crisis on this private sector bank, the stock market also recorded a huge decline.  Finance Minister Nirmala Sitharaman and Reserve Bank Governor Shaktikanta Das assured the depositors of Yes Bank that their money was safe and all necessary steps were being taken for the stability of the financial sector.  At the same time, in the major cities of the country including Delhi, Mumbai Ahmedabad, there was a long line of account holders for withdrawal of funds in front of Yes Bank branches.  People appeared apprehensive about their accumulated wealth.  From late Thursday night, there was a panic among customers for cash withdrawal and they started arriving at the ATM, but soon the ATM was empty. All types of accounts are under the hold of NetBanking and it is also reachable through its fast medium, and many more.  Have convinced for a solution.  I want to assure the businessmen of digital transactions that Yes banks are badly affected.  The money of every depositor is safe.

Solution soon
Reserve Bank Governor Shaktikanta Das said, the issues related to the bank will be resolved very soon. We have set a 30-day time limit for this.  From the Reserve Bank, you will see action in this direction very soon.

Banking sector not a problem:
A day ago, the Reserve Bank banned Yes Bank, the fourth largest private sector bank, in its new loan disbursement, restructured debt: State Bank, along with its chairman Rajnish Kumar said  That the bank's problem of monthly withdrawal of Rs 50 thousand has fixed only the limit related to it.

Yes Bank Update
Yes Bank's latest crisis has once again highlighted how much need is needed to bring transparency in the banking sector.

Some banks were merged with Yes Bank to overcome the financial crisis. A doubt was earlier handed over to HDFC Bank to provide financial relief to Centurion Bank of Punjab.  By merger or takeover, the central government and the Reserve Bank have so far been able to fix the banking sector.  This is not a new practice.  Again, there is no history of sinking of any bank in the country.  In fact, there are many reasons for Yes Bank's poor condition.  The first reason is excessive NPA i.e. bad debts, which the bank's board of directors tried to hide, in the past the board of directors had directed the board of directors to fix the books of the bank, but could not do so till now.  The board also failed to find an investor.  Consequently, the RBI had to take this action.

NPA Kamsala is not just of this bank. 
By the way, NPA Kamsala is not just of this bank.  All the government, cooperative and private sector banks of the country are struggling with this.  It was largely ignored in the initial years, but for the last four years, the central government has made special efforts to deal with it.  RBI governors like Raghuram Rajan and Urjit Patel had put 13 - 14 state-run banks under immediate remedial action (PCA), which is considered a kind of ban.  In this, neither bank can open new branch.  Neither can appoint new employees nor share new debts, etc.  Yes there are no restrictions associated with customers like withdrawal.
However, from a market perspective, an action like PCA is not considered good, as it reduces the liquidity in the market and affects the transaction.

Yes Bank another policy
Another policy lapse was that from 2013-14, there was a debt waiver of about five lakh crore rupees every year.  In this, about two and a half lakh crore rupees were waived in the name of providing relief to the farmers and the central and state governments, while the forgiveness of about one and a half lakh crores was NPAs, which were bad debts of big businessmen.  The remaining amount was another kind of apology.  The good thing is that in the last three years, the government has imposed all kinds of restrictions, making it nearly two and a half million rupees.  This is also one of the reasons for the economic slowdown in the country, which Yes Bank suffered.  How bad the financial health of this bank was, it was also guessed by the interest paid by it on the deposit amount.  This rate is the simplest way to know the status of a bank.  If a bank pays more interest to the general public on deposits than other banks, then it is believed that the bank lacks money, so it is doing business with money from the general public at a higher rate.  However this cannot be interpreted as meaning that the people in that bank.  Deposit - The amount is unsecured.  There is no insurance on the deposit amount. Earlier, an amount of up to Rs 1 lakh was insured in an account, which has been notified by the RBI on February 4, to five lakh.  Obviously, small investors will hardly be affected by Yes Bank's current crisis.  Yes, big investors can suffer losses, but they have multiple accounts, so they will not have much losses.  The Yes Bank case has once again intensified the demand for reform in the banking sector.  Some improvements are absolutely necessary.  For example, the method of audit of banks should be changed as soon as possible.  After the Satyam scam, the central government had decided that no auditor can conduct the same audit of a company continuously, he can do it twice.  But this rule does not apply to banks, because banks are governed by the RBI Regulation Act.  Now the time has come to apply this rule to banks as well.

Basel-3 and Basel-4. 
It is also necessary to follow the rules like Basel-3 and Basel-4.  To bring transparency in the functioning of banks.  International banks adopt these rules.  An institution called the Bank of International Settlements sets these rules.  This institution was first formed to settle the mutual dispute of international banks, but now it has also started to make rules - laws to improve the health of banks.  The local banks here do not follow the Basel rules, while adopting these rules will increase their accountability to inform the central bank.  The RBI had said it was mandatory for all banks to adopt Basel-3 by March 2020, but this seems unlikely to happen within this timeframe.  Another remedy may also be to move towards stress test ie cremels testing.  Under this, it is mandatory for banks to disclose their economic status to the general public through newspapers like the stock market.  it happens .  The general public is not right, banks can tell their financial condition to RBI.  It was recommended by Govarnararghuram Rajan, but it is still in cold storage.



Milan Tomic

Hi. I’m Designer of Blog Magic. I’m CEO/Founder of ThemeXpose. I’m Creative Art Director, Web Designer, UI/UX Designer, Interaction Designer, Industrial Designer, Web Developer, Business Enthusiast, StartUp Enthusiast, Speaker, Writer and Photographer. Inspired to make things looks better.

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