RBI says banking sector safe, hints at rate cut in April 3 policy meet

The Reserve Bank of India (RBI) on Monday (March 16) assured the depositors of cash-strapped Yes Bank their money is “completely safe”, and stated the Indian banking sector is sound and safe. It also hinted at a rate cut at the next Monetary Policy Committee (MPC) meet on April 3.

Addressing a press conference on Monday, RBI Governor Shaktikanta Das said the moratorium imposed on Yes Bank will be lifted at 6 pm on March 18. “Swift action has been taken by the Reserve Bank of India and the Government of India. The lifting of moratorium will be on Wednesday, March 16 at 6 pm,” he said.

Related news: Yes Bank crisis: ED summons Anil Ambani over money laundering charges

Das said the new board of the bank will assume its position and the office of the administrator will cease to exist on March 26. The Indian banking sector is sound and safe, he said. “I would like to convey to the depositors of Yes Bank, through you, that their money is completely safe and there is nothing to worry. There is no reason for any undue worry,” added the RBI governor.

Meanwhile, the central bank also hinted at a rate cut at the next Monetary Policy Committee (MPC) meet on April 3 and announced more liquidity enhancing measures. The market was expecting a rate cut as the presser was called only around noon after as many as 43 other central banks, including the US Fed, the European Central Bank and Bank of England, did so.

However, the RBI announced another round of $2 billion dollar-rupee swap on March 23 and up to ₹1 lakh crore of long-term repo operations as and when the market needs it.

(With inputs from agencies)

Related news: Cash-strapped Yes Bank reports ₹18,564-crore loss for December quarter