YES Bank Crisis: What happens to your EMI, Insurance Premium and Salary account?

Soon after the RBI placed the Yes Bank under a moratorium and restricted withdrawal limit to Rs. 50,000 per account until April 3, 2020, Reserve Bank of India’s Governor Shaktikanta Das today tried to boost the sentiments of the existing bank’s customers by saying that the central bank will protect all depositors' money. “The 30 days which we have given is the outer limit, you will see very swift action from the RBI to put in a place scheme to revive Yes Bank”, RBI governor Shaktikanta Das said.  But Friday morning saw YES Bank depositors rush towards the ATM to withdraw the cash and most of them were unable to do so because of the panic of having a lack of liquidity. Along with these customers who had linked their EMIs, salary and insurance account linked with YES Bank account were worried more, as to what they should do now?

Remember, a few months back what happened with the PMC Bank related to cash limit when it got bankrupt and account holders were in a havoc situation. But the situation with YES bank is not the same, only withdrawal limit is in a halt. If you are holding a bank account with the YES bank and do all your important transactions like EMI, Insurance Premium and other important transactions, then you need not worry. We will guide you as to how and when you can save yourself from being bankrupt.

By the time we were publishing this report, the Finance Minister Nirmala Sitharaman said, "I am closely monitoring every institution which requires that kind of monitoring along with RBI."

Speaking about employees, the FM said, "All employees of the reconstructed bank will continue in service with the same remuneration, terms and conditions of service for at least a year."

Yes Bank Crisis: What does Moratorium mean for customers?

• The simple meaning is a suspension or halt of something we can say. Whereas, YES Bank customers can withdraw maximum up to 50,000 rupees from their salary/savings/ any other deposit account until April 3, 2020.
• Customers having more than one account with the YES Bank will have to apply the halt cumulatively all the accounts
• In case of any emergency (Medical, marriage, education) as per RBI’s new guidelines one can withdraw maximum of Rs 5 lakh only. For that, one must submit the proof to the bank

Yes Bank Crisis: Tips for salary account holders

• If anyone who is having a salary account in YES Bank, then the first step that they should do is; talk to their employer and then switch to other bank to open an account

According to Suresh Sadagopan, Founder, Ladder7Financial “Whatever has happened with the YES Bank has happened now. Now, one must talk to their employer and open some other bank account. Find out what your employer is doing to tackle the situation. No need to make a panic at this point of time”.

• People with salary under Rs 50,000 should not worry till this month if the salary is credited to their account. As you can withdraw the cash from your account or can transfer it to some other account as soon as possible.

Yes Bank Crisis: EMI, Insurance Premium, SIPs

• Until and unless you will not inform your lender about your situation you have to pay the EMI and rest of the amount on monthly basis. So, inform your lender about your situation and tell them to transfer your loan account, EMI to some other bank in which you are having an account

“One needs to shift their EMIs, SIPs, and ensure without any disruption to move it into other bank accounts. What kind of more restrictions can come related to withdrawal in the future is yet not cleared, so it is better to just switchover to some other bank.” says Sadagopan

• Many fund houses have come forward to help their Mutual Fund holders and asked them to submit their new bank details
• Customers must give a cancelled cheque of their new bank account to the CAMS or nearby mutual fund office to change the existing details
• One can also download the CAMS app on their phone and can check the settings details accordingly
• Before the due date of your SIPs/EMIs/Insurance Premium instalment one must do the changes in order to avoid any future problem
• In a panic situation don’t redeem all your money from existing funds. Try to submit the new bank details before the due date of instalment

Remember, if the bank fails account holder will get rupees 5 lakh, including the interest since it is guaranteed by the Deposit Insurance and Credit Guarantee Corporation (DICGC). But in case of YES bank it is not applied because the bank is not failed only the withdrawal limit is yet announced. Government is yet taking many steps to save and restructure YES Bank.

Yes Bank Crisis: Quick points to keep in mind

• Don’t panic. If you don’t have another account apart from YES Bank, then open a new one.
• As per the YES Bank statement, one can pay the existing instalments accordingly. You just have to keep the money in your YES Bank account. So, no need to panic
• Transfer the monthly fixed amount in YES bank account, which goes for EMI and other instalments from your YES bank account and keep rest of the money in your new bank account
• It is always advisable to open more than two accounts in different banks and distribute your money accordingly
• Credit cardholders should not panic. A simple rule is there; spend and pay for credit cardholders. So, just don’t spend all the money from your credit card in order to save the cash. Afterwards, you must pay the interest remember
• Finance ministry is also taking steps to save the bank and restructure the financials
• Before redeeming the amount from your MFs, SIPs from your existing accounts do take advice from your financial planner
• Steps to transfer your loan EMI, premium, SIPs instalment has become very easy these days. So, don’t panic and follow the rules
• The digital world has made the financial world a better place to live in. So, go and opt for some of them and switch over to some other bank

Keep calm and ‘YES’ save your bank account smartly!

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