Reserve Bank of India bars YES Bank IFSC Business unit from taking forgien currency deposit. Recently, the YES Bank has fallen under worst circumstances, as the Bank already have charges on taking Loan from different institutions.
The Reserve Bank of India (RBI) has directed a subsidiary of Yes Bank to stop accepting foreign currency deposits, the Mumbai-based private sector lender said in its offer document for a follow-on public offering (FPO).
Yes Bank is hoping to raise Rs 15,000 crore through the FPO.
In a letter dated May 22, the RBI asked IFSC Business Unit (IBU), the subsidiary located in the International Financial Services Centre Gift City in Gandhinagar, Gujarat, to comply with the restriction within 12 months.
The RBI has found multiple instances of IBU breaching statutory norms, people privy to the development said, including on prescribed liquidity coverage ratio (LCR).
“RBI, pursuant to its letter dated May 22, 2020, has directed that the IBU is no longer permitted to access Foreign Currency Non-Resident (Bank) deposits raised by the Bank or any other banks in India, and has required it to comply with the direction by May 22, 2021,” the FPO document disclosed.
“This may impact the IBU’s ability to disburse loans and meet its borrowing repayment related requirements and consequently, further affect its business, financial conditions, operations and/or prospects,” the document said.