Private lenders may lose deposits to PSBs due to YES Bank bailout: Report

Moody's said the Yes Bank episode places the country's financial system on "alert" and the rescue in itself "exposes weaknesses in the process to support a failing private sector bank"

The YES Bank rescue has undermined confidence of depositors in private sector lenders and will lead to smaller entities losing deposits to state-run banks, a report by global ratings agency Moody's Investors Service said on Tuesday.

The research report comes at a time when many private sector lenders have reported a contraction of deposits in the March quarter when the YES Bank crisis happened. The RBI - which had to steer the over Rs 10,000 crore YES Bank bailout - has repeatedly assuaged such concerns, saying money in all the banks is safe.

"The YES Bank event undermines depositor confidence in