Vikash Sharma

Bhubaneswar: At a time when opposition parties have turned the heat on the Odisha government for parking Sri Jagannath Temple funds in Yes Bank, the Reserve Bank of India (RBI) on Thursday categorically stated that all depositors' money is entirely safe in private banks.

The clarification comes in the wake of media reports that some State governments have advised government bodies and other entities under their jurisdiction to transfer funds held with private banks to public sector banks.

In a letter to Chief Secretary Asit Tripathy, RBI Deputy Governor said, “We strongly believe that such a move can have banking and financial sector stability implications. RBI has adequate powers to regulate and supervise the private sector banks and by using these powers, it has ensured that the depositors'’ money is entirely safe.”

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After imposition of moratorium on Yes Bank limited, RBI has drawn up a draft scheme without any delay and every effort is being made to expedite the finalisation of the scheme, the letter read.

“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. We therefore request you to reconsider any decision you might have already taken or are in the process of taking to withdraw/ transfer funds deposited by the State government and its entities under your jurisdiction in private sector banks,” the RBI Deputy Governor wrote in his letter.

In a reply in Odisha Assembly, State Finance Minister Niranjan Pujari today informed that the Shree Jagannath Temple Administration had deposited the funds in Yes Bank in view of the higher interest rates offered by the bank. The managing committee selected the bank through a tender process and a proposal was also moved in this regard. As many as 12 banks gave quotations and Yes Bank was selected among them as it offered the highest interest i.e. 8.61 per cent per annum.

Out of the total Rs 626.44 crore, Rs 592 crore was kept in Yes Bank. While Rs 545 crore was deposited in the bank as fixed deposits, the remaining Rs 47 crore was in a Flexi account.

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