Reserve Bank of India governor Shaktikanta Das said on Monday that the moratorium on Yes Bank will be lifted on Wednesday at 6 pm. He said that the government and the RBI had taken swift and strong action to bolster the cash-strapped lender.
"The depositor's money is absolutely safe and there is no need for panic withdrawal," assured Das. He also said that the new Yes Bank board will take on March 26.
However, the RBI fell short on announcing a rate cut as widely expected by the markets.
Speaking about the decision on a potential interest rate cut owing to the economic and market slowdown, Das said that only the central bank’s monetary policy committee (MPC) will make a decision on it in its upcoming meeting after assessing the impact of the coronavirus.
"I'm not ruling out any possibility (on rate cut). We are estimating the impact of COVID-19 and we will give our growth estimates in MPC. India is relatively insulated from the global value chain, but there will be some impact," he said.
The RBI governor said that even as the Indian economy was relatively insulated from the global value chain, Covid-19 could impact India directly through trade channels, in which exposure to China is relatively high.
"As far as the Indian economy is concerned, India is relatively insulated from the global value chain to that extent impact on India will be less. But India is integrated to global economy so there will be some impact," Shaktikanta Das said.
"Second round of effects of the pandemic could operate through a slowdown in the domestic economic growth and it would obviously be a result of a synchronised slowdown in global growth and as a part of that, the growth momentum in India would also be impacted somewhat," he added.
Faced with a growing economic shutdown from the coronavirus pandemic, the US Federal Reserve on Sunday slashed the key interest rate to virtually zero.
The Fed cut its benchmark borrowing rate to a range of 0 per cent 0.25 per cent, where it was during the 2008 global financial crisis, and pledged to keep it there "until it is confident that the economy has weathered recent events."
New Zealand's central bank also had slashed its base rate to a record low of 0.25 per cent Monday, but economists said the surprise move was unlikely to prevent a coronavirus-induced recession.
The benchmark BSE Sensex index closed the day down by a whopping 2,713.41 points (-7.96%) settling below the 32,000 point mark at 31,390.07. The broader Nifty fell sharply too, shedding 757.8 points to settle 7.61% down at 9,197.4 points. The day saw over 1,980 stocks record a decline, with only 430 shares advancing in value and 152 scrips remaining level with their Friday close.