The Reserve Bank of India has attempted to put a stop to the growing fear among depositors that their money is not as safe as banks in India are not financially stable. In a series of two tweets, the RBI has assured depositors that there their deposits are safe.
The apex bank had said certain sections of the media had raised concerns about the safety of deposits of certain banks but it is a flawed concern.
Concern has been raised in certain sections of media about safety of deposits of certain banks. This concern is based on analysis which is flawed. Solvency of banks is internationally based on Capital to Risk Weighted Assets (CRAR) and not on market cap. (1/2)- ReserveBankOfIndia (@RBI) March 8, 2020
The RBI also stated that they are closely monitoring all banks and want to assure depositors that there is no cause of concern.
RBI closely monitors all the banks and hereby assures all depositors that there is no such concern of safety of their deposits in any bank. (2/2)- ReserveBankOfIndia (@RBI) March 8, 2020
These tweets by the RBI come a couple of days after it had imposed a moratorium on the crisis-ridden Yes Bank. The RBI had set the withdrawal amount for depositors at Rs 50,000 per account per month.
On Friday, RBI had announced the reconstructing scheme for YES Bank, According to the draft scheme, State Bank of India would be investing in Yes Bank and would own 49% stake in the bank and a new Board of Directors would be appointed. RBI had assured that the employees of YES Bank have job safety till at least a year and they don't need to worry.
Yes Bank founder Rana Kapoor has also been taken into custody by the Enforcement Directorate. He will remain in their custody till March 11. His daughter Roshini Kapoor was stopped from leaving to London as she was required for the probe.
Yes Bank is the latest bank to take a hit. Last year Maharashtra co-operative bank PMC Bank faced a similar situation.