Mumbai: Some institutional depositors and state government entities withdrew a total of 3% of private sector lender RBL Bank’s deposits in the past week following the debacle at bigger rival Yes Bank Ltd.
RBL Bank said there was, however, no material impact on retail deposits. As on 31 December, its total deposits stood at ₹62,907 crore, of which ₹16,855 crore were in current and savings accounts. While 73.2% of its total deposits were in term deposits, 16.4% and 10.4% were in savings and current accounts, respectively, as on 31 December.
“This issue is being addressed by us on a one-on-one basis with state governments and also at industry levels by the Reserve Bank of India (RBI). In spite of this, we remain highly liquid with significant retail deposits, institutional lines, refinance, and surplus liquid assets," RBL Bank said in a statement.
Last week, the central bank wrote to state governments, advising them against withdrawing deposits from private sector banks. “We therefore feel that apprehension on safety of deposits in private sector banks is highly misplaced and as already mentioned, such reactive decision will not be in the interest of stability of financial system in general and banking system in particular," the RBI letter said.
Concerns about flight of deposits from smaller private banks have intensified after RBI imposed a moratorium on Yes Bank on 5 March as part of a rescue plan for the troubled lender. On 16 March, RBI governor Shaktikanta Das assured all depositors of Yes Bank that their money is safe.
On Tuesday, RBL Bank reiterated that the lender is financially strong, well-capitalized, profitable, and a growing entity with strong governance. The bank’s shares rose 1.38% to ₹165.15 on BSE.
“Market rumours around financial health and stability of the bank are totally misplaced, motivated and not based on facts. RBL Bank is well-capitalized with a capital adequacy ratio of 16.08% with tier-1 at 15.02%," the bank said, adding that there has been no material adverse change in the asset quality since it announced fiscal third quarter earnings on 22 January.
The private sector lender’s profit fell 69% to ₹70 crore for the three months ended December from a year earlier, largely because of a surge in provisions. The bank’s total provisions almost quadrupled to ₹638 crore in the fiscal third quarter from a year earlier.