Mumbai: Yes Bank CEO-designate Prashant Kumar ruled out Tuesday a forensic audit of the lender’s books and remained non-committal on continuing to pay the present 5-6 per cent interest on deposits. Kumar also informed there is absolutely no worry on the liquidity front and a complete operational normalcy will be restored Wednesday from 6.00pm.
The retired SBI banker, who will formally take over March 26 as the chief executive and managing director of Yes Bank as per the rescue plan authored by the RBI, further said he expects Rs 8,500-10,000 crore recoveries in the March quarter as the bank has already made higher provisions of over 72 per cent from 42 per cent and that he does not expect more than the already announced five per cent more slippages.
“There is absolutely no need for a forensic audit on the books of Yes Bank as what we have declared in the Q3 results as doubtful assets are on most conservative (basis),” said Kumar flanked by Rajnish Kumar, chairman of SBI which is the largest shareholder of Yes Bank with close to 43 per cent ownership, and Ashutosh Khajuria of Federal Bank which has invested Rs 300 crore for its rescue.
“If at all we finally book an additional Rs 8,500 crore in fresh slippages, our higher provisions at 72 per cent will make sure that the credit cost comes down in absolute terms,” Kumar added.
However, both the Kumars were non-committal on whether the bank would continue to pay the higher six per cent interest to savings depositors.
On the issue of the bank being sued by the AT1 bondholders (Rs 10,000 crore worth of additional tier 1 debt), who claim that Yes Bank miss-sold the debt instrument to them which now have been completely written down by the RBI under the rescue plan, both the Kumars said the matter is sub-judice and if its proven that there was in fact mis-selling then it could be looked into.
“As the matter is pending at the Bombay High Court, let’s not discuss it much. All we can tell you is that as far the bank is concerned, we have not broken any written convents with the asset managers and bondholders,” they said.
It should be stated here that March 5, the Reserve Bank of India (RBI) had imposed a moratorium on Yes Bank for 30 days, including capping withdrawals at Rs 50,000 per depositor after it found that the new management was unable to raise the urgent core capital which had fallen much below the mandated level. Since last November, Yes Bank had been saying it would raise at least USD 2 billion in core equity capital.
But the bank and the RBI said the moratorium will be lifted March 18. “We have made adequate precautions. All our ATMs are filled with cash. All our branches have adequate supply of cash. So, from our side, there is absolutely no issue on the liquidity front,” Prashant said.