Private sector lender YES Bank has repaid Rs 50,000 crore to Reserve Bank of India (RBI) which is took under Special Liquidity Facility (SLF) much before the due date.
Bank chairman Sunil Mehta, in an address to shareholders at the lender's annual general meeting (AGM), said YES Bank has received strong customer liquidity inflows and has fully repaid the SLF of Rs 50,000 crore to RBI on September 8, well before the due date.
RBI had extended special funding support as a part of restructuring scheme to rescue the ailing bank.Rating agency Crisil has upgraded the rating on YES Bank’s certificates of deposit (CD) from “A2” t0 “A2+” in the funding and liquidity profile of the lender. This has been possible due to the gradual increase in its deposit base as well as sizeable capital raised recently.
Further, the bank's liquidity coverage ratio (LCR) has improved in recent months.
The bank's LCR improved to 114.1 per cent as on June 30, 2020 from 37 per cent as on March 31. Going RBI norms, the bank has to maintain minimum LCR of 80 per cent. Yes Bank's total deposits rose to Rs 1.17 trillion (including CD) as on June 30, 2020 from Rs 1.05 trillion as on March 31, 2020.
Mehta said the Bank successfully raised equity funding of Rs 15,000 crore through Follow on Public Offering (FPO) in July, within four months of the restructuring scheme, amid very challenging market conditions.
This demonstrates the strong confidence of institutional and retail investors in the Bank’s restructuring plan, action taken, future roadmap and its professional management under the new leadership, he added.
The capital infusion has helped the bank to significantly improve its capital position--Proforma common equity tier-I (CET1) ratio to 13.4 per cent in June 2020 from 6.3 per cent in March 2020. The overall capital adequacy ratio (CAR) improved to 20 per cent in June from 8.5 per cent in March.
YES Bank is now an associate entity of State Bank of India after capital infusion of about Rs 10,000 crore by Indian lenders as part of a rescue package hammered out by Reserve Bank of India.
According to Crisil, the private sector bank has to demonstrate its ability to control deposit outflow on a sustainable basis, and build a strong retail liabilities franchise. It also has to display a stable and sound operating business model with strong compliance and governance framework over the medium term.