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Rediff.com  » Business » SBI to pick up 49% stake in Yes Bank

SBI to pick up 49% stake in Yes Bank

Source: PTI   -  Edited By: Nandita Malik
March 06, 2020 21:55 IST
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From the appointed date, the authorised capital of the private sector bank would stand altered to Rs 5,000 crore and the number of equity shares at 2,400 crore having face value of Rs 2 each.

State Bank of India will pick up 49 per cent stake in the crisis-ridden Yes Bank under a government-approved bailout plan, with Finance Minister Nirmala Sitharaman assuring that depositors' money is safe.

A day after imposing moratorium on Yes Bank and restricting withdrawals, the RBI on Friday evening issued a draft reconstruction scheme for the private sector lender and said SBI has "expressed its willingness" to make an investment.

 

Earlier in the day, SBI chairman Rajnish Kumar met the finance minister.

A former SBI CFO has already been appointed administrator of the Yes Bank, whose board has been superseded.

"The investor bank shall agree to invest in the equity of the reconstructed bank to the extent that post infusion it holds 49 per cent shareholding in the reconstructed bank at a price not less than Rs 10 (Face value of Rs 2) and premium of Rs 8," as per the RBI proposal.

SBI has already obtained an 'in-principle' approval of the board to explore investment opportunity in Yes Bank.

From the appointed date, the authorised capital of the private sector bank would stand altered to Rs 5,000 crore and the number of equity shares at 2,400 crore having face value of Rs 2 each.

While talking to reporters, the finance minister said she was in continuous interaction with the RBI, which is fully seized of the matter.

Sitharaman further said no depositor will lose his or her money and insisted that the immediate priority is to ensure Yes Bank customers are able to withdraw money within the stipulated cap.

"I want to assure every depositor that their money shall be safe. Their monies are safe," she said.

"I am constantly in contact with the RBI and the steps that are taken are taken in the interest of depositors, banks and economy. We are fully seized of the development."

Earlier in the day, RBI Governor Shaktikanta Das said Yes Bank resolution efforts are aimed at maintaining "stability and resilience" in the Indian financial sector and the difficulties will be overcome "very swiftly".

The 30-day moratorium deadline is an "outer limit", he said at a banking event in Mumbai, reiterating that the interest of depositors will be "fully protected".

He also defended the timing of the move as "appropriate", saying Yes Bank was unable to come up with a solution despite being given time for internal resolution.

Yes Bank has been struggling to raise capital.

It sought to raise $2 billion initially during this fiscal, which was then pruned to $1.2 billion as it could not rope in any investor.

Also, the bank had deferred announcement of its financial results for the third quarter ended December.

The bank had told stock exchanges that it will publish the same on or before March 14, 2020.

Stock of Yes Bank plunged by over 80 per cent during intra-day trade on BSE and closed 56.04 per cent down at Rs 16.20 apiece.

Photograph: Utpal Sarkar/ANI Photo

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Source: PTI  -  Edited By: Nandita Malik© Copyright 2024 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.
 

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