RBI Governor Shaktikanta Das: If required, RBI will support Yes Bank with liquidity | India Business News

NEW DELHI: The Reserve Bank of India (RBI) governor Shaktikanta Das on Monday said that the RBI will support the crisis-hit Yes Bank with liquidity and assured depositors that their money continues to be safe.
Das said that both RBI and the government of India have taken swift action on the crisis and the reconstruction is credible and sustainable .
He also said that the moratorium on the bank would end on March 18 at 6 pm and the new board will take over on March 26.
Defending the steps taken on Yes Bank and expressing confidence in getting the intended outcomes, Das said the identity of the bank will be retained as a private sector lender.
Das also said that despite the crisis at Yes Bank and the rapidly evolving coronavirus pandemic on the economy and the banking system, the health of the banking system is good.
“The Indian banking sector, including the private sector is safe” he noted.
RBI governor on rate cut
On expectations of a rate cut before its monetary policy meet on April 3 as the financial markets which have witnessed sharp decline due to the coronavirus outbreak, Shaktikanta Das said that the decision will be taken by the MPC (monetary policy committee) as the situation evolves.
“Rate cuts are done through MPC , but I am not ruling out anything,” Das added.
He further added that the central bank also has several other policy instruments and tools that it can deploy, as and when needed.
The market was expecting a rate cut as the presser was called after as many as 43 other central banks, including the US Fed, the European Central Bank and Bank of England, did so.
However, the RBI announced another round of $2 billion dollar-rupee swap on March 23 and up to Rs 1 lakh crore of long-term repo operations as and when the market needs it.
Shaktikanta Das on coronavirus
On the impact of coronavirus outbreak on Indian economy, Das said COVID-19 could impact the country directly through trade channels, in which exposure to China is relatively high.
“India is not immune to this pandemic as already more than 100 cases have been reported. Effort are being mounted by the govt on war-footing,” the RBI governor noted.
As the number of cases in India are on the rise, Das advised banks to encourage customers to use digital payments and limitexchange of physical currency.
RBI directive to banks, financial institutions
In a notification , the RBI asked all banks and financial institutions to assess the impact on their balance sheet, asset quality, liquidity, among others, in the wake of the potential threat arising out of the spread of coronavirus disease in India.
“Besides taking steps…for ensuring business process resilience, supervised entities should also assess the impact on their balance sheet, asset quality, liquidity, etc. arising out of potential scenarios such as further spread of COVID-19 in India and its effect on the economy, contagion from wider disruption in the global economy and the global financial system, etc,” RBI said.
It also proposed the constitution of a Quick Response Team (QRT) to provide regular updates to the top management of businesses on significant developments and act as a single point of contact with regulators/outside institutions/agencies.
(With agency inputs)

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