Mumbai: Describing the reconstruction scheme for Yes Bank as credible and sustainable, Reserve Bank of India (RBI) Governor Shaktikanta Das on Monday sought to assure the private bank's depositors that their hard-earned money is safe.
He also said that the central bank will infuse additional liquidity into private lender, if required, and urged depositors that there was no need to carry out panic withdrawals after the moratorium on the bank ends on Wednesday (March 18).
"It is a very credible and sustainable restructuring plan," Das said while addressing the media here on the Yes Bank issue and the coronavirus crisis.
Terming the restructuring of the bank a "historic development", he said that it is the first time a weak and failing bank has not been merged with another stronger lender and rather the central bank has gone ahead with reconstructing the bank."It is also an instance of public private partnership (PPP) for revival of a private sector bank," he said.
Against the backdrop of the Maharashtra government deciding to desist from having accounts in private sector banks, Das said that RBI has written to all state governments saying that the Indian banking sector is sound and safe, including the private banking sector.
"There is no reason for the state authorities to keep away from private banks who are important components of the banking sector," he said.
The government on Saturday notified the scheme of reconstruction for cash-strapped Yes Bank Ltd paving the way for the lender to resume full operations. The bank on Monday said that it will resume its full-fledged operations at 6 p.m. on Wednesday (March 18).
Investment by private banks has so far reached Rs 3,950 crore. Among the private players, ICICI Bank and Housing Development Finance Corporation committed Rs 1,000 crore each. Axis Bank and Kotak Mahindra Bank committed to invest Rs 600 crore and Rs 500 crore respectively. Both Federal Bank and Bandhan Bank have been allotted shares for Rs 300 crore each as per their commitment and IDFC First Bank has been issued equity shares in the crisis-ridden bank for a consideration of Rs 250 crore.
Further, SBI which would hold 49 per cent stake in the cash-strapped lender has been allotted 605 crore shares for Rs 6,050 crore. SBI, the largest public sector bank in the country, has in fact committed Rs 7,250 crore. On Thursday, it said that its Executive Committee of the Central Board (ECCB) has approved the purchase of 725 crore shares in Yes Bank at Rs 10 per share.
The private sector bank had been put under a moratorium by the Reserve Bank of India since March 5 which has restricted deposit withdrawals up to Rs 50,000 per month. Under the terms of the notified scheme, this moratorium will now be lifted at 6 p.m. on March 18.
The Central government has appointed former SBI official Prashant Kumar as the new Chief Executive Officer of the financially troubled Yes Bank. Kumar is currently the administrator of bank, and the former Chief Financial Officer and Deputy Managing Director of SBI will take over his new responsibilities once the moratorium on the stressed lender is lifted on Wednesday.
Yes Bank will restart full-fledged banking services from Wednesday, 6 p.m. onwards.
Accordingly, the Reserve Bank imposed moratorium will come to an end at the same time.
In a tweet, the bank on Monday said: "We will resume full banking services from Wed, Mar 18, 2020, 18:00 hrs. Visit any of our 1,132 branches from March 19, 2020, post commencement of banking hrs to experience our suite of services."
No Discontinuation Of Rs 2000 Banknotes: MoS for Finance Anurag Singh Thakur
The government on Monday said no decision has been taken to discontinue printing of Rs 2,000 banknotes, and state-owned SBI and Indian Bank are reconfiguring ATMs for Rs 500 and Rs 200 notes.
"No indent was placed with the presses for printing of Rs 2,000 denomination notes for 2019-20. However, there is no decision to discontinue the printing of Rs 2,000 banknotes," Minister of State for Finance Anurag Singh Thakur said in a written reply in Lok Sabha.
The minister was replying to a question whether the government has stopped printing of new Rs 2,000 currency notes and if the public sector banks have issued any circular to stop circulation of Rs 2,000 notes through ATMs.
"In view of the higher circulation of currency notes of Rs 500 and Rs 200 denominations and inconvenience faced by the customers in exchanging Rs 2,000 currency notes, two of the public sector banks namely State Bank of India and Indian Bank have been issued instructions to the field functionaries to reconfigure the ATMs for currency notes of Rs 500 and Rs 200 denominations," Thakur said.
He said printing of banknotes of particular denomination is decided by the government in consultation with the Reserve Bank of India (RBI) to maintain desired denomination mix for facilitating demand of public.
Banknotes of Rs 2,000 denomination worth Rs 7.40 lakh crore have been printed and supplied so far, he said. The total face value of banknotes of Rs 2,000 denomination in circulation and in currency chests was Rs 5.49 lakh crore and Rs 0.93 lakh crore, respectively.
Detailing about the denomination of lower-value currencies in circulation as on March 5, he stated that there are 19,624.77 million pieces of Rs 100 notes valued at Rs 1.96 lakh crore; 8,556.84 million for Rs 50 notes valued at Rs 42,784.20 crore; Rs 20 and Rs 10 denomination notes were valued at Rs 16,619.60 crore and Rs 30,510.79 crore, respectively.
"The quantum of banknotes that needs to be printed broadly depends on the requirement for meeting the demand for banknotes due to inflation, GDP (gross domestic product) growth, replacement of soiled banknotes and reserve stock requirement," Thakur said.
As on March 5, 67,002.24 million pieces of banknotes of 10, 20, 20 and 100 rupees denominations and 5,005.98 million pieces of coins of 10 rupee denomination were in circulation, the minister added.
"Printing of banknotes of particular denomination is decided by the government in consultation with the RBI to maintain desired denomination mix for facilitating transactional demand for public," he added.
(With Agency Inputs)