YES Bank gets Rs 60k-cr line of credit from RBI to resume operations

RBI Governor Shaktikanta Das on Monday had said the regulator was ready to offer liquidity if required

The Reserve Bank of India (RBI) has extended a credit line of Rs 60,000 crore to YES Bank to ensure that the bank is able to meet its obligations to depositors as it resumed its full-service operations on Wednesday, according to sources familiar with the development. RBI Governor Shaktikanta Das on Monday had said the regulator was ready to offer liquidity if required.

“YES Bank has enough liquidity to meet any requirements. If required, the RBI will provide necessary liquidity support to it,” he said. “Never in the history of banks (in India) have depositors lost money. The point is, depositors’ money is absolutely safe,” Das had said in a conference, adding that the central bank’s support should come as a “comforting factor for depositors”.

However, this is a case of the RBI being the “lender of the last resort”, and, in accordance with the terms of the arrangement, the bank will have to use its immediate liquid assets before it can touch the credit line, sources said. This is perhaps for the first time that the RBI has come with such an arrangement. YES Bank gets Rs 60k-cr line of credit from RBI to resume operations In the past it preferred merging troubled banks with solvent ones. There is a technical reason for that even as the RBI officials did not spell it out in the press conference on Monday.