New Delhi: Rating agency Moody’s on Friday said the moratorium by RBI on Yes Bank is credit negative as it affects timely repayment of bank depositors and creditors.
Alka Anbarasu, Vice President and Senior Credit Officer, Financial Institutions, Moody’s Investors Service, said: “RBI’s moratorium on Yes Bank is credit negative as it affects timely repayment of bank depositors and creditors.
“While Moody’s expects Indian authorities will take steps to prevent the weakness in the bank’s viability from significantly impacting its depositors and senior creditors, the lack of a coordinated and timely action highlights continued uncertainty around bank resolutions in India.”
RBI on Thursday imposed a moratorium on the capital-starved YES Bank, capping withdrawals at Rs 50,000 per account and superseded the board of the private sector lender with immediate effect till April 4.
Yes Bank, for a month, 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 board of SBI on Thursday gave an “in-principle” approval to invest in the bank, which has been struggling to execute a capital raising plan for the last six months. Its core equity tier-I ratio had declined to 8.7 per cent as of September. The bank had also delayed its December quarter results.
The last lender to be placed under a similar action by the RBI was PMC Bank in September last year for fraudulent activities.
