RBI Said To Extend Rs 60,000 Crore Credit Line To Yes Bank
The Reserve Bank of India has extended a Rs 60,000-crore credit line to Yes Bank Ltd. for meeting obligations to depositors, sources said today.
This is in line with the assurance given by RBI Governor Shaktikanta Das on Monday that the regulator is ready to offer liquidity to Yes Bank after lifting of moratorium.
"I would like to mention that Yes Bank has enough liquidity to meet any requirement. If there is a requirement, RBI will provide necessary liquidity support," he had said. "Never in the history of banks (in India) have depositors lost money. The point is, depositors' money is absolutely safe.”
According to Section 17 of the Reserve Bank of India Act, 1934, the central bank can provide liquidity support to any lender in the form of loans and advances against collateral such as stocks, funds and securities (other than immovable property) in which a trustee is authorised to invest trust money by an Act of Parliament.
According to the sources, RBI's assessment found Yes Bank had liquidity issues but no solvency problem or any other issue. The line of credit, however, comes with a caveat—the first such exercise by the central bank, the sources said.
Since RBI is the "lender of the last resort", according to terms of arrangement, Yes Bank would have to exhaust immediate liquid assets before accessing this fund, the sources added.
The central bank superseded Yes Bank after the private sector lender was placed under moratorium on March 5. Deposit withdrawals were capped at Rs 50,000 per account apart from other restrictions.
On March 13, the government notified a rescue plan for Yes Bank, led by State Bank of India and joined by other lenders, as it looked to shield the wider banking sector from the Yes Bank crisis. The moratorium was lifted on Wednesday evening.
On Thursday, Yes Bank shares fell 11.33 percent to Rs 53.60 apiece on the National Stock Exchange while the benchmark Nifty 50 shed 2.52 percent to end the day at 8,263.45 points.