The Yes Bank restructuring plan is proceeding apace. The executive committee of the central board of State Bank of India has approved the purchase of 725 crore shares of Yes Bank at ₹10,
the country's largest lender said in a communication to the stock exchanges.
SBI said the bank’s shareholding in Yes Bank will remain within 49% of the paid up capital of Yes Bank.
SBI’s investment in the private sector lender now works out to ₹7,250 crores.
This is much higher than the original plan of investing ₹2,450 crores for a 49% stake.
While SBI’s stake will not exceed ₹10,000 crore, as per the restructuring plan, it is required to maintain a minimum stake of 26% for three years.
Efforts are also underway to rope in more private investors to recapitalise the beleaguered Yes Bank.
..The story so far: On the advice of the Reserve Bank of India (RBI), the government imposed a moratorium on Yes Bank with effect from 6 p.m. on March 5 up to April 3.
Subsequently, the RBI superseded the private sector lender’s board and appointed as an administrator, Prashant Kumar, who was serving as chief financial officer and deputy managing director at State Bank of India (SBI).
Mr. Kumar resigned from the SBI to assume charge as the administrator of Yes Bank.
Under the moratorium, deposit withdrawals have been capped at ₹50,000.
Within 24 hours, the RBI proposed a reconstruction scheme under which SBI could take a maximum 49% stake in the restructured capital of the bank.
the country's largest lender said in a communication to the stock exchanges.
SBI said the bank’s shareholding in Yes Bank will remain within 49% of the paid up capital of Yes Bank.
SBI’s investment in the private sector lender now works out to ₹7,250 crores.
This is much higher than the original plan of investing ₹2,450 crores for a 49% stake.
While SBI’s stake will not exceed ₹10,000 crore, as per the restructuring plan, it is required to maintain a minimum stake of 26% for three years.
Efforts are also underway to rope in more private investors to recapitalise the beleaguered Yes Bank.
..The story so far: On the advice of the Reserve Bank of India (RBI), the government imposed a moratorium on Yes Bank with effect from 6 p.m. on March 5 up to April 3.
Subsequently, the RBI superseded the private sector lender’s board and appointed as an administrator, Prashant Kumar, who was serving as chief financial officer and deputy managing director at State Bank of India (SBI).
Mr. Kumar resigned from the SBI to assume charge as the administrator of Yes Bank.
Under the moratorium, deposit withdrawals have been capped at ₹50,000.
Within 24 hours, the RBI proposed a reconstruction scheme under which SBI could take a maximum 49% stake in the restructured capital of the bank.
The SBI, which had earlier said its Board was exploring an investment in Yes Bank, will pick up a 49% stake, according to the scheme.
The deal would be at a price not less than ₹10 per share with face value of ₹2.
The SBI cannot reduce its holding below 26% before completion of three years from the date of infusion of the capital, the RBI said.
To pick up 49% stake, SBI will have to invest ₹2,450 crore, sources said.
On March 5, the government had put a moratorium on Yes Bank till April 3 following its deteriorating financial condition and the banking regulator superseding the board and appointed an administrator.
The new Board will have at least six members, an MD & CEO, a non-executive chairman and two non-executive directors, while the remaining two nominee directors would be appointed by the SBI.
“The members of the Board so appointed shall continue for a period of one year, or until an alternate board is constituted by Yes Bank Ltd., whichever is later,” the RBI said.
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