Yes Bank Ltd said on Thursday, 26 March, it was looking to raise up to Rs 5,000 crore ($665.88 million) in an effort to shore up its capital base after a government-led rescue of the private sector lender.

yes bank
Policemen stand guard as people wait outside a Yes Bank branch to withdraw their money in Ahmedabad, March 6, 2020.Reuters

India earlier this month approved a rescue plan, which saw State Bank of India, the country's largest public lender, take a 49 per cent stake in Yes Bank after the central bank placed the lender under a moratorium on March 5.

The bank resumed normal operations on March 18.

RBI issues another notification

The cap on withdrawals will have a few exemptions and depositors can withdraw money more than the set limit in cases like medical emergency, higher education, marriage and unavoidable emergency. The order of moratorium was issued on recommendations by the Reserve Bank of India (RBI).

The RBI, meanwhile, has issued another notification stating that the board of Yes Bank has been suspended for a period of 30 days "owing to a serious deterioration in the financial position of the Bank". The central bank has superseded the board of the troubled private lender.

The logo of State Bank of India is pictured next to its headquarters in Mumbai, India, March 14, 2016

SBI board approves investment in Yes Bank

The development came hours after reports that the government has approved a plan for the State Bank of India (SBI), the country's biggest lender, to buy a state in Yes Bank. "This has been done to quickly restore depositors' confidence in the bank, including by putting in place a scheme for reconstruction or amalgamation," the RBI release said.

The central bank also said that a steady decline in the bank's financial position was largely due to its inability and that "it had no other alternative" but to issue an application asking the government to take action against the bank.