Shillong, May 2: Uday Kotak made a statement regarding JPMorgan’s acquisition of First Republic Bank following the government’s takeover of the ailing local lender. As of right now, JPMorgan will “assume all deposits, including all uninsured deposits, and substantially all assets” of First Republic Bank, according to the California Department of Financial Protection and Innovation.
Kotak emphasised the need for robust domestic financial institutions supported by trustworthy local capital when commenting on this trend. The banker claimed that India needed to foster these institutions just as the US had.
Kotak tweeted, “One more bank failure: First Republic Bank. JPMorgan immediately swoops it up. Highlights strong domestic US financial institutions with significant capital & capable leadership. India too must nurture strong institutions backed by reliable domestic capital”.
As the chances of saving the San Francisco-based bank decreased, JPMorgan made the decision to buy First Republic Bank. The failure of private sector efforts to reach a settlement also prompted the authorities to take control. Banks have previously been hesitant to provide funds to the distressed regional institution, but some were reportedly interested in making proposals if it went up for auction.
First Republic Bank had been taken over by the California Department of Financial Protection and Innovation, which ultimately resulted in its liquidation, as confirmed by the Federal Deposit Insurance Corporation (FDIC).
The struggling lender was experiencing growing problems as a result of falling share prices and huge deposits being withdrawn, which further eroded investor confidence.