KCC Bank hopeful of getting deposits in Yes Bank back
Lalit Mohan
Tribune News Service
Dharamsala, March 8
After the Dharamsala Smart City, another government organisation seems headed for uncertainty.
Sources here said that the Kangra Central Cooperative (KCC) Bank, one of the biggest cooperative banks of the state, had a fixed deposit of Rs 150 crores in Yes Bank. The money is likely to remain stuck till the Yes Bank financial crises issue is not resolved and depositors are allowed to take back their money.
Managing Director of KCC Bank Vinay Kumar admitted that the cooperative bank had a fixed deposit of Rs 150 crores in Yes Bank. “Most of the fixed deposits are to mature in the month of June and I hope by that time the ban on withdrawal of funds from Yes
Bank was lifted and the KCC bank would get its money back”.
When asked as to why the KCC Bank had kept its money in Yes Bank despite the fact that news had been circulating regarding financial crises in the bank, the MD said that fixed deposit was kept in private bank as per the guidelines and norms of the RBI, he said.
The sources here said the KCC bank had deposited extra cash available with it under Inter-bank deposit scheme. Cooperative banks and financial institutions that have extra money available with them park it with other government and private banks. The money is parked in other banks to earn extra interest. Such types of deposits come in the category of bulk deposits and private banks give extra interest for such bulk deposits.
Bulk deposits are considered safe deposits by financial institutions like the KCC Bank as compared to extending loans to industry or other business ventures where risk factor was higher.
The sources said that the deposit of the KCC bank was safe as of now as the government has directed the SBI to take over 49 per cent stake in Yes Bank. In case the SBI takes a majority stake in Yes Bank, money of the depositors would be safe.
However, the share holders of Yes Bank, who would be given just Rs 10 per share by the SBI, are likely to take legal recourse. In such a scenario the money of depositors in Yes Bank could get struck in litigations.
