The Reserve Bank of India, in its draft restructuring scheme for Yes Bank, has said that a new board of directors would be appointed for the bank after its 'reconstruction'. It has also said that the office of the Administrator of Yes Bank Ltd. appointed by the Reserve Bank will be vacated once the new Board takes charge.
The new board of directors will include a CEO who would also be the Managing Director. Other Board of Directors members would be a Non-Executive Chairman and two Non-Executive Directors.
State Bank of India has expressed interest in investing in Yes Bank, according to the draft scheme. It will have the right to nominate two directors to the Board of Directors of the reconstructed bank. SBI is likely to invest in the equity of Yes Bank to the extent that it holds 49 per cent shareholding post the infusion.
"Reserve Bank of India may appoint Additional Directors in exercise of the powers conferred by sub-section (1) of Section 36AB of the Banking Regulation Act, 1949," the draft scheme says.
The Board of Directors of Yes Bank can add more directors to board as long as the number does not exceed the maximum prescribed by the Articles of Association.
"The Board of Directors thus appointed will continue to hold their chair for a period of one year, or until an alternate Board is constituted by Yes Bank Ltd. through the normal procedure laid down in its Memorandum and Articles of Association," it added.
The RBI said that the employees will continue their services with the same salary and terms as are already applicable for at least a year. "Board of Directors of the Reconstructed Bank will however, have the freedom to discontinue the services of the Key Managerial Personnel (KMPs) at any point of time after following the due procedure," said the RBI.
The scheme also clearly states that all the offices and branches of Yes Bank will continue to function in the same manner and place as they are currently operating.