Yes Bank initiates process to exit reconstruction plan; to set up new board

Private lender Yes Bank on Wednesday said that it has initiated the process of formation of the alternate board as it will exit the "YES Bank Reconstruction Scheme March 2020," more than two years after the government instituted the rescue plan.

The lender said its existing board of directors has recommended the constitution of an alternate board for approval of shareholders at the upcoming Annual General Meeting (AGM,) which will be held on July 15, 2022.

“The alternate board is being constituted and will operate under the applicable laws and regulations as against the current board which was constituted and is functioning under the ambit of the Reconstruction Scheme,” said the lender in a release.

Commenting on the occasion of the Board’s decision on forming the alternate Board, the Chairman of the Board Sunil Mehta said “YES Bank today accomplishes a significant milestone of coming out of the Reconstruction Scheme by initiating the process of formation of the alternate Board. On this occasion, I wish to compliment and thank my colleagues on the Board, the Reserve Bank of India, Government of India, State Bank of India and all other investors, Bank’s customers and importantly the 24,000 plus highly dedicated employees of YES Bank for having achieved a historic turnaround of one of the largest private sector banks of this country."

The government had in March 2020 notified the "YES Bank Reconstruction Scheme." The existing board of the bank was constituted, which included appointment of following directors:

a. Four Directors including MD&CEO and Chairman as mentioned in the Reconstruction Scheme namely, Sunil Mehta, Chairman of the Board, Mahesh Krishnamuti, Board Member, Atul Bheda, Board Member and Prashant Kumar, MD & CEO.

b. Two SBI nominee directors who are the officers of SBI

c. Two RBI appointed Additional Directors

Further, the Reconstruction Scheme stated that the members of the Board, other than the Additional Directors appointed by RBI, shall continue in office for a period of one year, or until an alternate Board is constituted.

The bank’s largest shareholder, State Bank of India, has proposed Prashant Kumar’s candidature for the position of MD and CEO of the Bank for a period of another three years, which will be subject to approval of the alternate board, Reserve Bank of India and the shareholders.

On Wednesday, shares of Yes Bank closed 0.76 per cent higher at Rs 13.18 apiece on BSE.