Banks are well capitalised and nothing is to worry about- CEA Subramanian

Indians are not able to decide whether they should trust the Indian banks any more or not. There are so many cases where the bank have proven the Indians wrong and now, people are not sure if they really should trust them and keep their money in the banks or to their own.

On this, the CEA, Chief Economic adviser Krishnamurthy Subramanian said that the Indians do not need to worry and all the banks are well capitalised.

He commented- “It is important to keep this in mind that the international norms for CRAR (capital to risk weighted assets ratio) is 8%. Our banks have way more capital, at 14.3%, which is about 80% greater (than globally mandated norms). Our banks on an average are very well capitalised. There is absolutely no reason to worry,”

CRAR is a metric through which we can measure the capital adequacy as in the terms of riskiness of loan which is given by the lender. He said that because of the situation which is getting worse for YES Bank holders and for the fact that they do not have anything to do by withdrawing their money at bank for more than INR 50,000 and this restriction will be there till 3rd April,2020.

On Sunday recently, the ED, Enforcement directorate has also arrested the YES Bank’s founder Rana Kapoor for the charges of money laundering.

Subramanian said- “Together with the fact that our banks are well capitalised and the fact that the deposits are well taken care of, there is absolutely no reason for anyone to worry. What I want to emphatically state is that the m-cap ratio is a totally incorrect metric for assessing the safety of the banks. No banking sector expert or banking regulator uses this measure,”