Moody’s Upgrades Yes Bank Ratings, Breather For Depositors
Bhubaneswar: The ratings of once capital-starved Yes Bank have been changed to ‘stable’ from ‘positive’ and that of its long-term foreign-currency issuer upgraded to B3 from Caa1 after the bank’s equity capital raise of Rs 15,000 crore.
These ratings by Moody’s Investors Service comes four months after the Reserve Bank of India (RBI) curbs on the private bank regarding deposits, loans and withdrawals, owing to its poor financials.
The 30-day moratorium, including a cap of Rs 50,000 on withdrawals, on March 5 had triggered fears over the fate of the huge cash of Puri’s Jagannath Temple deposited in the bank. The SJTA decision to withdraw the money from nationalised banks and park it in a private bank only last year, apparently in a hush-hush manner, had drawn sharp reactions from opposition political parties and also servitors and the temple managing committee.
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The Rs 592 deposit included a Foundation Fund of nearly Rs 91.74 crore and Corpus and Temple Funds that have Rs 244.60 crore and 255.66 crore respectively.
Stung by the criticism, the SJTA had hurriedly announced that the cash would soon be withdrawn and deposited in nationalised banks despite an assurance from the RBI about the safety of the funds.
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A day after resuming full banking services, Yes Bank on March 19 had remitted Rs 397 crore to the designated SBI Account of Jagannath Temple Corpus Fund as instructed by the temple authorities. This included the principal amount of Rs 389 crore and interest Rs 8.23 crore.
The bank remitted the remaining Rs 160 crore of the Jagannath temple fund on March 30.
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“The significantly improved solvency ratio strengthens the bank’s resilience to potential asset quality risks resulting from the ongoing impact of the economic slowdown and coronavirus-related disruptions on India’s economy,” the rating agency was quoted as saying by CNBCTV18 said.
Yes Bank continues to benefit from liquidity support of around Rs 25,000 crore from Reserve Bank of India (RBI) as of July 28, 2020. In March 2020, the bank had received a total of Rs 50,000 crore in liquidity support from RBI, the report added.
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