Deepak Parekh, Uday Kotak speak up on Yes Bank fiasco; tell depositors, ‘Your money is safe’

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March 6, 2020 3:04 PM

India’s biggest bankers Deepak Parekh, Aditya Puri, and Uday Kotak stepped in to assure the customers of troubled private sector Yes Bank, saying that they believe that depositors’ money is in safe hands and the moratorium might not last for the full 30-day period.

Deepak Parekh said that he thinks the RBI has taken a timely plan, since Yes Bank’s financial results were due on March 14.

India’s biggest bankers Deepak Parekh, Aditya Puri, and Uday Kotak stepped in to assure the customers of troubled private sector Yes Bank, saying that they believe that depositors’ money is in safe hands and the moratorium might not last for the full 30-day period. In an interview with CNBC TV18, Uday Kotak, Executive Vice-Chairman and Managing Director of Kotak Mahindra Bank, said, “I expect action in the next few days. Pretty confident this action under section 45 of the Banking Regulation Act will protect the customers of Yes Bank.” Deepak Parekh, Chairman, HDFC, seconded Uday Kotak’s views and said, “The moratorium won’t last till April 3, a solution will come sooner.”

Deepak Parekh said that he thinks the RBI has taken a timely plan, since Yes Bank’s financial results were due on March 14. “Things should settle down in a few days,” he added. While Uday Kotak and Deepak Parekh claimed that the reaction of investors towards the Yes Bank stock was unnecessary and unwarranted, both the veterans instead asked depositors to patiently wait for the central bank and government to announce a plan which they believe will come in at the earliest. “I genuinely believe that the RBI and government are fully capable of bringing stability in the market and the financial sector is strong to facilitate that,” said Uday Kotak, who was given the charge of steering IL&FS out of its troubles.

Following the comments made by both the pioneers of India Inc, HDFC Bank Managing Director Aditya Puri said that he was sure that the restructuring will happen way before the moratorium end date. “Restructuring will happen way before April because that is in everybody’s interest,” Puri said in an interview on CNBC TV18. Puri went on to add that he believes that appropriate steps have been taken to enable that money markets to function safely.

Claiming that the financial sector in India is in safe hands, Deepak Parekh said, “Our financial system is strong, one company going under does not shake up the Indian financial system. The way the public is reacting is as if it is the end of the world. But, it is a temporary overreaction.” When asked about the possibility of a private player stepping in with SBI to save Yes Bank, both Deepak Parekh and Uday Kotak said that the financial details of Yes Bank will have to be looked at for the same. “We as players in financial markets should look at what we can do and facilitate the restructuring of Yes Bank,” said Uday Kotak. Deepak Parekh did not say whether HDFC has been asked to step in with SBI in an effort to help Yes Bank stay afloat, but said that Yes Bank needs capital and it will get that capital with the system facilitating the revival.

Earlier today, SBI Chairman Rajnish Kumar met the Finance Minister and said that the financial sector of the country is safe and Yes Bank is a bank-specific issue, not a sector-specific one. Soon after, Finance Minister Nirmala Sitharaman too appeared before the press saying that the RBI is leaving no stone unturned in making sure that customers don’t feel any pain during the restructuring of Yes Bank.

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