BackYour money with Yes Bank is absolutely safe, Shaktikanta Das tells depositors
Das said RBI is ready to provide liquidity support to Yes BankThe RBI Governor said that this is the first instance of a public-private partnership to revive a crisis-hit bank
PremiumMumbai: Reserve Bank of India (RBI) governor Shaktikanta Das on Monday assured all depositors of Yes Bank Ltd that their money is safe and there is no reason to withdraw cash in panic.
Yes Bank has enough liquidity and RBI is ready to provide liquidity support to the bank if required, Das said. “I want to tell depositors that their money is completely safe. No reason for panic withdrawal or undue worry," he said.
The assurance comes ahead of the lifting of a moratorium on Yes Bank at 6pm on Wednesday. On 5 March, RBI imposed a moratorium on Yes Bank and superseded its board, capping all withdrawals by depositors at ₹50,000.
Das said that this is the first instance of a public-private partnership to revive a crisis-hit bank. Unlike previous instances, RBI chose not to merge a stressed bank with a strong bank. Instead, it prepared a rescue plan under which an eight-member consortium, led by State Bank of India (SBI), invested ₹10,000 crore into the bank. Das affirmed that the Yes Bank reconstruction scheme is a “very credible and sustainable" restructuring plan.
Das hoped that depositors would retain their loyalty to the bank. “Large number of depositors remained loyal to the bank. I do expect them to continue their loyalty because a large part of the banking sector has invested in the bank. Our interactions with SBI and others gives us confidence that it is a sound and solid plan."
Defending the plan, Das added that the bank will remain a private sector lender.
“RBI’s action has been very swift and was taken very fast. It is perhaps a record of sorts," he said. “Never in the banking history of India, depositors of a scheduled commercial bank have lost money," he added.
Das also noted that RBI has written to state governments assuring them of the safety of private sector banks and there is no need to withdraw deposits from these banks.
As part of Yes Bank’s draft reconstruction scheme, SBI picked up nearly 49% stake in the troubled private sector lender. Under this plan, large private sector institutions including Housing Development Finance Corp. Ltd, ICICI Bank Ltd, Kotak Mahindra Bank Ltd, Axis Bank Ltd, IDFC First Bank, Bandhan Bank and Federal Bank infused equity into the bank, along with SBI.
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