‘Monitoring All Banks, No Concern of Safety of Deposits in Any Bank,’ Says RBI on Yes Bank Crisis

New Delhi: Two days after suggesting a revival plan for the crisis-ridden Yes Bank, the Reserve Bank of India (RBI) on Sunday said that it is closely monitoring all the banks. The RBI also assured all depositors that there is no such concern of the safety of their deposits in any bank.

Saying that concern has been raised in certain sections of media about the safety of deposits of certain banks, the RBI said this concern is based on analysis which is flawed.

The RBI said the solvency of banks is internationally based on Capital to Risk-Weighted Assets (CRAR) and not on market cap.

“Concern has been raised in certain sections of media about the safety of deposits of certain banks.  This concern is based on analysis which is flawed. Solvency of banks is internationally based on Capital to Risk-Weighted Assets (CRAR) and not on market cap,” the RBI said in a tweet.

Concern has been raised in certain sections of media about safety of deposits of certain banks. This concern is based on analysis which is flawed. Solvency of banks is internationally based on Capital to Risk Weighted Assets (CRAR) and not on market cap. (1/2)

— ReserveBankOfIndia (@RBI) March 8, 2020

In another tweet, it said, “The RBI close monitors all the banks and hereby assures all depositors that there is no such concern of the safety of their deposits in any bank.”

RBI closely monitors all the banks and hereby assures all depositors that there is no such concern of safety of their deposits in any bank. (2/2)

— ReserveBankOfIndia (@RBI) March 8, 2020

The statement from RBI comes on a day when Yes Bank founder Rana Kapoor, who was arrested on money laundering charges, was taken to the ED custody till March 11.

The development comes after the RBI in Friday imposed a moratorium on Yes Bank, capping withdrawals at Rs 50,000 for the next one month.

The RBI on Saturday released a new plan for the Yes bank proposing that the State Bank of India (SBI) acquire a 49 per cent stake in Yes Bank. The RVBI also stated that the SBI has expressed its willingness to make an investment in Yes Bank and participate in its reconstruction scheme.

The draft plan proposes that the investor bank will invest in the reconstructed bank for up to 49 per cent stake.

“It has been proposed that the investor bank will not reduce its holding in the new bank below 26 per cent before completion of three years from the date of infusion of the capital,” said the Draft Yes Bank Ltd Reconstruction Scheme 2020.