MUMBAI: Yes Bank resolution efforts are aimed at maintaining "stability and resilience" in the Indian financial sector and the difficulties will be overcome "very swiftly", RBI Governor Shaktikanta Das said on Friday.
The 30-day moratorium deadline is an "outer limit", he said, reiterating that the interests of depositors will be "fully protected". He also defended the timing of the move as "appropriate", saying Yes Bank was unable to come up with a solution despite being given time for an internal resolution.
The comments came within 12 hours of the RBI having superseded the capital-starved lender's board, placed an administrator and imposed caps like limiting maximum deposit withdrawals at Rs 50,000 per account for the next month.
The surprise moves, which came even as there was chatter about the government asking SBI and LIC to help Yes Bank, have led to concerns being expressed on the way forward and its impact on the Indian financial system.
"It (resolution) will be done very swiftly, it will be done very fast. Thirty days which we have given is the outer limit. You will see a very swift action from RBI to put in place a scheme to revive Yes Bank," Das told reporters here.
There will always be two views on the timing of the move, with some quarters calling it as premature while others would claim it was a delayed response, Das said, asserting that RBI's timing was "appropriate".
"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, the RBI decided to intervene," he explained.
Earlier, delivering a speech at an event by industry lobby Assocham, Das said the action on Yes Bank should not be seen as one related to a single entity, but looked at more broadly. "The decision is taken at a larger level, the decision is taken not only to deal with the problem in an individual entity but also to maintain stability and resilience of the indian financial sector and banking sector," he said.
He added that the Indian banking sector continues to be "sound and safe" and the RBI is ready to take on all the challenges before the sector. "We stand committed to maintain stability of financial and banking sector in India," he said.
Under the RBI actions, Yes 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 be led by the RBI-appointed administrator Prashant Kumar, an ex-chief financial officer of SBI.
Yes Bank's outstanding deposits stood at Rs 2.09 lakh crore as of September 2019, while it has reduced the size of assets by 6 per cent over the year to Rs 2.24 lakh crore for September. The RBI had on Thursday hinted at there being excessive deposit withdrawals.
Its capital buffers are precarious with the core equity tier-I ratio at 8.7 per cent as of September, only marginally above the regulatory mandated. The bank is yet to come out with the results for the December quarter and sought an extension to March 14 due to the capital raising plans.
Despite repeated attempts, and discussion around a slew of names, none of the fund raising plans have fructified.
According to reports, SBI and LIC will be taking 51 per cent stake in the beleaguered lender. SBI chairman has said that Yes Bank will not be allowed to fail, and has also appreciated its brand and technology investments.
The bank's scrip plunged over 56 per cent to Rs 16.20 apiece on the BSE.