Secure money in private banks, state governments do not deposit deposits: RBI

(PTI) New Delhi, Ta. March 12, 2020, Thursday

The Reserve Bank of India has asked the state governments not to withdraw their deposits from private banks. The RBI has ensured that the lenders' money is safe in private banks.

In a letter to the chief secretaries of all the states, the RBI has said that withdrawal of deposits from private banks will have an adverse effect on the banking and financial sectors. The letter is written after reports in which state governments have directed government and other entities to withdraw deposits from private banks and deposit them in government banks.

"We certainly believe that if the state government gives such a directive, it will jeopardize the financial and banking sector's stability," the RBI said in the letter. The RBI has emphasized that it is closely monitoring all private banks and that the money of the landlords in private banks is safe and secure and there is no need to withdraw money from private banks.