In New Delhi, Around 9.30pm on Thursday, Lalit Keshre, co-founder and CEO of investment platform Groww, got to know of the moratorium that Reserve Bank of India (RBI) had imposed on Yes Bank. He called up his team to assemble at the office immediately. Groww was heavily dependent on Yes Bank for its banking needs.
While the team started reaching out to other banks, an executive from Axis Bank messaged Keshre and asked if he needed help. “For the next 12 hours, there were hundreds of calls exchanged between ours and Axis Bank’s team. Multiple WhatsApp groups were made. We migrated the entire system from Yes Bank to other banks such as Axis Bank and ICICI Bank,” said Keshre.
Many startups were in a similar frenzy. Anand Kumar Bajaj, managing director and CEO of payments company PayNearby, said he Bajaj worked with different banks for the whole night to restore the systems the next morning.
Once the systems were up and running with other banks, these startups optimized them over the weekend. Most of the teams at startups impacted due to the Yes Bank crisis have been in office for two-three days starting Thursday night. “It was an exhausting weekend,” said Bajaj.
PhonePe, one of the worst-affected firms, managed to resume services on Friday. “We added ICICI Bank as our new banking partner, and this ensured that there was seamless transition for all of its 20 crore customers. Our platform processed over ₹4,000 crore worth of transactions in 24 hours after it resumed service (numbers as of Sunday) and we saw the largest ever volume of user traffic in a single day (with over 70 million app sessions),” said PhonePe CEO and founder Sameer Nigam. He said employees worked for 36 hours to revive the services.
Startups that managed to restore their systems had existing relationships with multiple banks. While Yes Bank was their primary bank, they had signed up with others as well and had been using some of their services.
The National Payments Corporation of India (NPCI) had advised large players to have multiple partnerships, which many like PhonePe had started. “Where required, the payment providers identified alternative partner banks who quickly stepped in to address contingency requirements. The payment systems have had minimal disruption and the non-Yes Bank customers can make payments for all their daily requirements,” NPCI said.
But those that relied only on Yes Bank are facing a tough time. “If a startup has to start fresh sign-up with the bank to open an account, it would take a few days to process the paperwork. Players, who only worked with Yes Bank, can take upwards of 15 days to get things back to normal,” said Ravi Rajagopalan, managing director and CEO of Empays Payment Systems.
Those who had existing relationships got support from every corner. Banks such as Axis Bank, ICICI Bank and IndusInd Bank were working with them without a break, from Thursday to Sunday.
News Source: Livemint