Bloodbath on D-Street as Yes Bank Shares Tank Over 80% After Moratorium, RBI Assures Swift Resolution

Mumbai: Defending the timing of Yes Bank's moratorium, Reserve Bank of India governor Shaktikanta Das on Friday assured swift resolution to the issues concerning the beleaguered lender.

“The resolution (to Yes Bank) will be done very swiftly, it will be done very fast. 30 days which we have given is the outer limit. You will see a very swift action from RBI,” Das told reporters here.

The decision on Yes Bank was taken at a larger level, not only to deal with the problem in an individual entity, but also to maintain stability and resilience of the Indian financial and banking sector, he said.

“Let me assure you that our banking sector continues to be sound and safe," Das said, adding that RBI was ready to effectively deal with the challenge ahead. "We stand committed to maintaining stability of financial and banking sector,” he said.

On the timing of the action on Yes Bank, he said there is always debate over RBI acting prematurely or taking too long to act.

“A market-led and bank-led resolution of the problem is always preferable. You have to give time to the bank management to take step and efforts. And the bank did take efforts. When we found that we cannot wait and should not wait any longer, we decided to intervene,” he said.

“I think the timing is appropriate. I can assure you that RBI will come out with a scheme very shortly,” Das said.

Chief Economic Adviser Krishnamurthy Subramanian also assured depositors that their funds would remain safe and there was no need to panic.

Yes Bank was on Thursday placed under a moratorium, with the RBI capping deposit withdrawals at Rs 50,000 per account for a month and superseding its board.

The bank will not be able to grant or renew any loan or advance, make any investment, incur any liability or agree to disburse any payment. For the next month, Yes Bank will led by the RBI-appointed administrator Prashant Kumar, an ex-chief financial officer of SBI.