New Delhi, Mar 28 (KNN) The Reserve Bank of India (RBI) has said that Indian Banking system is in safe hands and there is no need to resort to panic withdrawals.  

On Friday, he announced several measures to counter economic fallout from a fast-spreading coronavirus in the country.

''Let me reiterate that the Indian banking system is safe and sound. In the recent past, COVID-19 related volatility in the stock market has impacted share prices of banks as well, resulting in some panic withdrawal of deposits from a few private sector banks. It would be fallacious to link share prices to safety of deposits,'' Shaktikanta Das said in a statement on Friday.

Depositors of commercial banks including private sector banks need not worry on the safety of their funds.

''I would, therefore, urge members of public as well as the public authorities, who have deposits in private sector banks, not to resort to any panic withdrawal of their funds,'' Das added.

RBI will continue to be vigilant and take steps necessary to mitigate the impact of coronavirus, he said.

The central bank's six-member monetary policy committee (MPC) held an unscheduled meeting this week by video conference to arrive at its decision.

RBI also cut the repo rate by 75 basis points to 4.40 per cent and reduced reverse repo rate by 90 basis points to 4 per cent.

It also decided to reduce the cash reserve ratio (CRR) of all banks by 100 basis points to 3 per cent from 4 per cent of net demand and time liabilities with effect from the fortnight beginning March 28 for a period of one year.