Indian Railways employees ordered to switch salary accounts from Yes Bank to other banks

Yes Bank Crisis: The Indian Railways has directed its employees to open new salary account if their salary account in Yes Bank. The Indian Railways informed its employees that the financial status of the Yes Bank is not so good and after the RBI intervention, the railway employees might have to face problems in the future if they continue with their salary account in the Yes bank. So, the railway authority has asked its employees to shift their salary account to other banks.

Indian Railway directed its employees for the same in a written communication citing, "Indian Railways employees drawing their salary in the Yes Bank account are requested to open their salary account in other nationalised bank as the financial condition of the Yes Bank is not so good." The Railway Board issued the letter in this regard and directed all of its zones to inform its employees in regard to Yes Bank salary account.

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On 5th March 2020, the Reserve Bank of India (RBI) had placed Yes Bank under moratorium citing the 'weak financial status' of the fourth largest private bank of India. "The financial position of Yes Bank Ltd. (the bank) has undergone a steady decline largely due to the inability of the bank to raise capital to address potential loan losses and resultant downgrades, triggering the invocation of bond covenants by investors, and withdrawal of deposits. The bank has also experienced serious governance issues and practices in recent years which have led to a steady decline of the bank. The Reserve Bank has been in constant engagement with the bank’s management to find ways to strengthen its balance sheet and liquidity," the RBI has said while putting Yes Bank under moratorium. The Apex Indian Bank also barred Yes Bank account holders from withdrawing more than Rs 50,000 in a month, which included EMI, Credit card payment, etc.

However, Yes Bank on 11th March 2020 said its inward real-time gross settlement (RTGS) services have been enabled to allow customers to make payments towards their credit card dues and loan obligations from other bank accounts. The announcement comes a day after its customers were allowed inward IMPS and NEFT services for the same purposes. RTGS is used for payments of over Rs 2 lakh, while payments below this amount can be made using NEFT. Besides, loan and credit card repayments to the bank can also be done through IMPS from other bank accounts.