Mumabi:
Reserve Bank of India governor Shaktikanta Das said on Monday the moratorium on Yes Bank will be lifted on Wednesday at 6pm as he stressed there was swift and strong action by RBI and the government to shore up the private lender.
Das reiterated depositors’ money is absolutely safe and that there is no need for panic withdrawal.
If needed, the Reserve Bank of India (RBI) will step in to provide necessary liquidity to Yes Bank, central bank governor Shaktikanta Das said in a press briefing on Monday, adding that there was no reason for depositors to rush to withdraw funds from the bank.
“I would like to convey to the depositors of Yes Bank, through you, that their money is completely safe and there is nothing to worry. There is no reason for any undue worry,” Das said during a press conference.
“The underlying theme on which the scheme is based is to protect the depositors’ interest,” he said.
Das also said that the new Yes Bank board will take on March 26.
Earlier India’s cabinet had approved a rescue plan for Yes Bank, in a bid to prevent a broader banking crisis.
The state-owned State Bank of India (SBI), the country’s largest lender, would take a 49% stake in Yes Bank, Finance Minister Nirmala Sitharaman said, while private lenders also committed to invest in the bank.ICICI Bank, Housing Development Finance Corp Ltd, Axis BankNSE -10.58 %, Kotak Mahindra Bank, Bandhan Bank, Federal Bank and IDFC First have also joined the SBI-led consortium and invested in Yes Bank.
HDFC will invest Rs 1,000 crore in Yes Bank through a purchase of 100 crore shares. Axis Bank will invest Rs 600 crore by buying 60 crore shares and Kotak Mahindra Bank Rs 500 crore through 50 crore shares.
The (RBI), took control of Yes Bank last week, imposing limits on withdrawals to prevent a run on deposits before working out a rescue for the bank once considered a rising star after it was set up in 2004.
Meanwhile,Das said the Reserve Bank of India's monetary policy committee will decide if a rate cut is needed to help the economy facing the coronavirus outbreak.
Das announced two policy measures to stabilise financial markets: a US dollar sell/buy swap on March 23 worth $2 billion and a Long Term Repo Operation in multiple tranches of up to Rs 1 trillion.
Das in the media briefing said forex and bond markets are not immune to the coronavirus. He, however, assured that the central bank would not hesitate to use various policy instruments at its disposal to deal with the economic impact of the virus.
"The RBI will make efforts to see policy announcements have optimum impact and desired outcome," said Das.
The US Federal Reserve on Sunday night slashed the policy rates to near zero levels. Similarly, the Bank of England had earlier slashed the rates by 50 basis points.
Second round of effects of the pandemic could operate through a slowdown in the domestic economic growth and it would obviously be a result of synchronised slowdown in global growth and as a part of that, the growth momentum in India would also be impacted somewhat Indian stocks plunged on Monday, closing nearly 8 per cent lower, as moves by central banks across the globe to cut interest rates failed to calm nerves about the impact of the coronavirus pandemic on the global economy.
India has reported 114 coronavirus cases till Monday as it stepped up scrutiny and preventive measures.