Yes Bank repays entire Rs 50,000 crore special liquidity facility dues to RBI

MUMBAI: Private lender Yes Bank has fully repaid Rs 50,000 crore to the Reserve Bank of India it borrowed under the Special Liquidity Facility (SLF). In an address to shareholders at the lender’s annual general meeting chairman Sunil Mehta said the entire payment was made much before the due date as the bank received strong customer liquidity inflows. Mehta also clarified that there was no plans to merge with its largest shareholder State Bank of India.

“I am pleased to report that the Bank has, fully repaid SLF of Rs. 50,000 cores to the RBI on September 8, 2020 well before the due date,” Mehta said.

The private lender had borrowed money from the RBI in anticipation of strong deposit outflows after the regulator decided to lift the moratorium placed on the bank. The bank since then also raised nearly Rs 15,000 crore through a further public offering (FPO). Post the fund raise the bank’s Pro-forma Common Equity Tier (CET) 1 ratio doubled to 13.4% from 6.6% at the end of June, 2020, bringing its capitalization largely in line with the private sector peers.

“The significantly improved solvency ratio strengthens the Bank’s resilience to potential asset quality risks resulting from the impact of the economic slowdown and COVID-19 related disruptions on India’s economy,” Mehta said. “We are closely monitoring the stress on our credit portfolio on account of legacy issues, current macro-economic and Covid -19 situation.”

Though Mehta sounded a cautious note and added that given the uncertainty and full economic impact of COVID-19 on key sectors, it was difficult to fully ascertain the implication of the moratorium in the short to medium term on the bank’s book.





[Source – Economic Times]

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