After restricting the withdrawal limit to Rs 50,000 during a 30-day moratorium period on Yes Bank, the Reserve Bank of India (RBI) has come up with a draft reconstruction plan, under which SBI is scheduled to acquire up to 49 per cent stake in the private sector bank.
Following the RBI action against the bank, Asset Management Companies (AMCs), insurance companies and other financial institutions start refusing to accept Yes Bank cheques, putting investors in a very inconvenient position.
Yes Bank account holders, however, given chance to change their account, so that inflows into investment schemes don’t suffer as well as payouts don’t get stuck up due to withdrawal restrictions from the accounts.
But what the account holders do to minimise damage?
“Before we discuss what people should do, let’s discuss what they shouldn’t,” said Rachit Chawla, Founder & CEO, Finway, adding, “As dire as the situation appears to be, people should not panic and the reason for that is that the Reserve Bank of India has already superseded Yes Bank board for 30 days and some pretty stiff restrictions have already been placed on the bank.”
Talking on how to handle the situation, Chawla sad, “There are a few ways by which you can handle this situation. Now, you do not need to worry about your losing your hard-earned money. The Reserve Bank of India has intervened and hopefully, that matter will be sorted soon, but of course, there are some things that you can do to avoid any unprecedented unfortunate situations.”
While AMCs have provide Yes Bank account holders opportunity to investors to receive the redemption proceeds to other banks, what the investors should do to ensure that their periodic investments don’t get stopped?
“First of all, change the auto-debit bank immediately without any delay. This will ensure that it won’t get bounced,” said Chawla, adding, “Another smart thing to do here is to keep withdrawing Rs 50,000 (which is the maximum withdrawal bar set by the Reserve Bank of India, for the while) slowly and steadily and keep transferring that amount to another bank till the mayhem in the Yes Bank settles down.”
“After you have successfully switched to a new account, contact your SIP/Insurance consultant and ask him to update the information. By doing this, all your premiums will get auto-debit from your new and updated account. If one will follow these initial steps then they can sustain in this situation well enough to wait till the time Yes Bank and Reserve Bank of India makes any further statements regarding any developments,” Chawla further said.