Addressing a press conference in Mumbai on Monday, Shaktikanta Das informed the depositors of the troubled Yes Bank that there was no urgency to withdraw their money. All his statements were geared towards instilling confidence in the investors that all steps to lessen the negative impact of the coronavirus on the economy were in place. He said they were adequately geared towards ensuring the normal functioning of the financial markets and institutions. The RBI Governor went on to add further , that despite the massacre in the financial markets in the wake of the coronavirus outbreak, they were completely ready to take any policy measures to counter the situation.
This press conference was aimed at addressing the concerns of the market participants and assuring the depositors that all attempts were being made to ensure the safety of their money.
An assurance was given by him that central bank would provide liquidity to Yes Bank if it was needed, after March 18, when the moratorium on withdrawals would be lifted. Das made an affirmation of their readiness to act with efficiency whenever it was needed. He categorically ruled out any premature steps or delayed response as part of their action plan which went a long way in reassuring the depositors.
He stated that “Yes Bank has enough liquidity to meet any requirement. If there is a requirement, RBI will provide necessary liquidity support to meet its requirements. So that is a comforting factor for the depositors that the RBI will support Yes Bank if liquidity is required,”
The RBI according to him has several instruments at its command, and is “ready to take all necessary measures to ensure that the effects of COVID-19 pandemic on the Indian economy are mitigated and financial markets continue to function normally.”
He mentioned that there would be no rate cut but the market participants who were expecting rate cuts were highly disappointed by this announcement.
When the RBI Governor was questioned as to why the interest rates were unchanged he answered that “According to the prevailing law, the rate cut call has to be taken through the Monetary Policy Committee. But I don’t rule out anything.”
He was upbeat about the fact that Yes Bank’s revival plan will be a workable solution and its identity as a private sector entity would be retained.