To save the First Republic of America from drowning, 11 big banks of America have come forward to help. These banks will infuse capital of $ 30 billion (about Rs 2.5 lakh crore) in the First Republic, so that its depositors do not have any problem in withdrawing money. These 11 banks include JP Morgan, Citigroup, Bank of America, Wells Fargo, Morgan Stanley, US Bancorp, Truist Financial, PNC Financial.

JP Morgan, Bank of America, Citigroup and Wells Fargo will infuse $5 billion each. Goldman Sachs and Morgan Stanley will put in $2.5 billion. Rest of the banks will also infuse small amounts of capital. Earlier on Sunday, First Bank issued a statement saying that it had received access to $70 billion in funds from JP Morgan and the Federal Reserve.

Earlier, 8 banks came forward in a similar way to save India’s Yes Bank. There has been a gradual improvement in the financial performance of Yes Bank since the commencement of the reconstruction scheme. A condition has been placed before investors investing in private banks that they will have to keep 75 per cent of their total investment in the bank during the lock-in period.

This step shows trust in banks
American banks that put capital said, ‘This step shows their trust in the First Republic and banks of all sizes. At the same time, US Treasury Secretary Janet Yellen, Federal Reserve Board Chairman Jerome Powell and Federal Deposit Insurance Chairman Martin Grunberg said, ‘This step of the banks is very welcome. This shows the resilience of our banking system.

Recovery in First Republic shares
Since March 6, there was a sharp decline in the shares of First Republic. The bank’s shares were broken by about 70%. Its stock had closed at $122 per share on March 6. Then on March 8, it came down to $115 per share. At one point on March 16, it slipped below $20, but after that the news of the help of banks returned strongly and it climbed almost 10% to close at $34.27.

American banking crisis has no effect on Indian banks
America’s banking crisis will not affect Indian banks. American investment company Jefferies and financial services firm Macquarie had said that Indian banks are in a strong position due to reliance on local deposits, investment in government bonds and adequate liquidity.

8 banks also came to save India’s Yes Bank
After rescuing Yes Bank, eight financial institutions led by SBI infused Rs 10,000 crore into the bank. These rupees were inserted on 13 March 2020 under the rescue plan. Shares were allotted to these investors at Rs 10 per share. SBI had initially invested Rs 6,050 crore in Yes Bank to acquire 49% stake.