Reserve Bank of India (RBI) governor Shaktikanta Das on Monday held a confidence-building press conference to assure Yes Bank depositors that there was no cause to panic when the moratorium on the Bank is lifted on 18th March. He said the central bank would support Yes Bank with liquidity, if the need arises.
“I would like to convey to the depositors of Yes Bank, through you, that their money is completely safe and there is nothing to worry about. There is no reason for any undue worry,” said Mr Das.
As expected by many, there was no rate cut announcement and the governor said that this could only be decided by the monetary policy committee (MPC).
The RBI governor emphasised that the government and the central bank had acted swiftly to find a solution to the Yes Bank issue.
Commenting on the economic fallout of COVID-19, Mr Das says, the RBI stands ready to take whatever action is required at the appropriate time. “It could impact India directly through trade channels in which exposure to China is relatively high.
“Second round of effects of the pandemic could operate through a slowdown in the domestic economic growth and it would obviously be a result of synchronised slowdown in global growth and as a part of that, the growth momentum in India would also be impacted somewhat,” he added.
Avoid Cash, Use Digital Payment Options
In a separate release, RBI has asked bank customers to avoid using cash and, instead go for digital payment options to limit the fallout of the coronavirus pandemic.
It says, "Non-cash digital payment options (like NEFT, IMPS, UPI and BBPS) are available round the clock to facilitate fund transfers, purchase of goods / services, payment of bills, etc. In the context of the efforts to limit the fallout of the coronavirus pandemic by avoiding social contact and visit to public places, public can use these modes of digital payment from the convenience of their homes through online channels like mobile banking, internet banking, cards, etc. and avoid using cash which may require going to crowded places for sending money or paying bills."
Banks Asked To Devise Strategy & Mechanism To Contain Covid-19 Spread
Separately, the RBI has asked all banks to encourage their customers to use digital banking facilities, especially looking at the spread of coronavirus (Covid-19).
Further, banks are asked to devise strategy and monitoring mechanism about spread of the disease within the organisation, and make timely interventions for preventing further spread in case of detection of infected employees including travel plans and quarantine requirements as well as avoiding spread of panic among staff and members of the public.
"Taking stock of critical processes and revisiting business continuity plan (BCP) in the emerging situations or scenarios with the aim of continuity in critical interfaces and preventing any disruption of services, due to absenteeism either driven by the individual cases of infections or preventive measures and taking steps of sharing important instructions or strategy with the staff members at all levels, for soliciting better response and participation and sensitizing the staff members about preventive measures or steps to be taken in suspected cases, based on the instructions received from health authorities, from time-to-time," RBI says.
Lenders have also been asked by the central bank to assess the impact on their balance sheet, asset quality, and liquidity arising out of potential scenarios such as further spread of COVID-19 in India and its effect on the economy, contagion from wider disruption in the global economy and the global financial system.