As the day dawned following the Reserve Bank of India’s abrupt imposition of a ₹50,000 withdrawal limit, customers of private sector lender Yes Bank Ltd on Friday prepared for the worst.
Some had already started queuing up at Yes Bank ATMs on Thursday night. On Friday morning, they made a desperate dash for branches.
Anmol Kang, 35, reached a Yes branch facing a serious problem. He needed to withdraw cash for his father’s angioplasty after other options, such as net banking and Unified Payments Interface (UPI) transfer, had failed.
Kang said he queued up outside an ATM all night on Thursday.
“There was a long line at the ATM. I could only withdraw up to ₹2,000 at a time, and I queued up, again and again, to withdraw as much as I could till the ATM ran out of cash.”
Unfortunately, for Kang, while lightning doesn’t strike the same place twice, bank failures in India seem to do so.
His family maintained fixed deposits with another troubled bank, the Punjab and Maharashtra Co-operative (PMC) Bank Ltd, which was brought down by fraud committed by the bank’s management in September 2019.
“My father used to have an account with the PMC Bank, and we still have about ₹6 lakh worth fixed deposits that are blocked there,” said Kang.
Several bewildered customers gathered at the bank’s branch-cum-ATM located at its headquarters in Prabhadevi (Mumbai). Most wanted to withdraw cash, hoping that at least the ATMs next to the bank’s head office would dispense cash. But the ATM had run dry.
“Bring your cheque books for withdrawals,” branch officials told customers. Those who wanted to transfer money via Real Time Gross Settlement system from the branch were told to come back later.
Employees shrugged helplessly at a crisis that was not of their doing, and one that could hurt them, too.
Neha Jagdale, a 32-year-old auditor, has been a Yes Bank customer for six years. She awaited her turn (token number 53) as bank officials too waited—for the cash to arrive at the branch.
“They are trying to tell us that this is a temporary crisis, but I’m not so sure about that. I have about ₹3 lakh stuck in a fixed deposit that was due to mature in May, with which I planned to buy a car, but now I don’t even know when I’ll get my money back,” she said.
Another customer, a civil engineer in a private firm who declined to be named, anxiously clutched a flight ticket as he argued with bank officials. He needed his money to book hotels, tours and other expenses for the holiday he had planned and booked flights for.
At another branch, in Worli, sullen-looking customers silently filled out cheques for the maximum permissible withdrawal of ₹50,000 put in place till 3 April by the central bank.
On paper, customers can draw more than ₹50,000 for medical emergencies, but when Kang asked for the benefit of this exception, bank officials said there was “insufficient clarity”.
Like Kang, Yes Bank customers across India are likely to find their lives disrupted, and in many more ways.
UPI payments have been hit, mutual funds have stopped crediting funds to Yes Bank accounts to protect investors and brokerages have halted credits to Yes Bank accounts.
However, unlike with PMC Bank, RBI has cobbled up a rescue scheme for Yes bank, which will see State Bank of India acquire up to 49% in the bank. Until then, Yes Bank customers have their backs against the wall. Utility bills have to be paid, travel and medical emergencies have to be met—somehow, all without the benefit of their hard-earned bank balance.
Ashwini Kumar Sharma in New Delhi contributed to this story