SBI has stepped in to save due to 2 reason -
- Government of India has asked them to do so. A crash in 4 th largest private bank could trigger crash in overall financial system. Also today SBI chaiman has cleared the same giving example of US and UK as how these countries saved thier banks to avert a financial crisis trigger. All banks are connected heavily to each other in terms of lending. Also, depositer's safety is prime concern of SBI and Government.
- Cash and assets size - 76000 crore is the size of assets hold by Yes bank in Government bonds, Rbi cash deposits and other instruments. Having an access to this amount of amount cash reserve in only 2500 crore is a win win for SBI.
- Mortgages - They will own all mortgages of Yes bank. Yes bank gave bad loans to some companies but not all specially Retail lenders. These would be thousands of crores which have been given to good investors. These are bank mortgages which are transferred to new owner whoever takes control of bank. Now SBI bought Yes bank in a penny stock price and got control of all mortgages worth thousands of crores. They will utilize these funds to pay off the depositors and make some profit also.
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