Defending the timing of YES Bank's moratorium, Reserve Bank of India (RBI) governor Shaktikanta Das on Friday assured swift resolution to the issues concerning the beleaguered lender.
“The resolution will be done very swiftly, it will be done very fast. 30 days which we have given is the outer limit. You will see a very swift action from RBI,” told reporters after ASSOCHAM's 15th annual banking summit.
On the timing of the action on YES Bank, Das said there is always debate over RBI acting prematurely or taking too long to act.
“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, we decided to intervene," Das added.
YES Bank was on Thursday placed under a moratorium, with the RBI capping deposit withdrawals at Rs 50,000 per account for a month and superseding its board.
The 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.
The RBI governor also said that the impact of Covid-19 on India will be limited, but cautioned that certain sectors which depend on China will be impacted due to the epidemic and the mitigatory steps are being taken.
"Impact on India will be limited as the economy is not too integrated with global value chain; and to that extent, we will be insulated," he said.
The governor stated that RBI stands ready to intervene in whatever way required to respond to epidemic challenges.
The coronavirus (Covid-19) outbreak has now spread to more than 78 countries — from South Korea to Italy, Iran, Japan and the United States. At least 11 people have died of Covid-19 in the US while UK reported its first death. A total of 97,873 cases have been reported worldwide and 3,382 people have died of the virus. However, according to reports of the total cases 54,121 cases have recovered from the infection.
India's confirmed cases have risen to 30. Prime Minister Modi deferred his Brussels visit scheduled for the end of this month while India and EU also postponed meet. Separately, 1,252 patients who arrived from affected countries in Kolkata have been quarantined.