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RBI announces restructuring of Yes Bank; SBI to hold 49% stake

Yes Bank crisis: RBI said that the investor bank or SBI will invest in the equity of Yes Bank to the extent that it holds 49 per cent shareholding post the infusion

Anwesha Madhukalya | March 18, 2020 | Updated 08:59 IST
RBI announces restructuring of Yes Bank; SBI to hold 49% stake
Yes Bank crisis: RBI announces reconstruction scheme

The Reserve Bank of India has announced a reconstructing scheme for the revival of Yes Bank that was put under restrictions by the apex bank on Thursday night. The apex bank said that State Bank of India has expressed interest to invest in the troubled bank and participate in the reconstruction scheme. It said that the investor bank or SBI will invest in the equity of Yes Bank to the extent that it holds 49 per cent shareholding post the infusion.

"The Authorised Capital shall stand altered to Rs 50,00,00,00,000 (Rupees five thousand crore only) and number of equity shares will stand altered to 24,00,00,00,000 (two thousand four hundred crore only) of Rs 2 (Rupees Two only) each aggregating to Rs 48,00,00,00,000 (Rupees four thousand eight hundred crore only)," stated the RBI.

This implies that the new value of Yes Bank will be Rs 24,000 crore and SBI-led consortium will have to invest at least Rs 11,760 crore to own 49 per cent stake.

The apex bank said that SBI's investment will be done at a price not less than Rs 10 (Rupees ten only). "The Investor bank shall not reduce its holding below 26% before completion of three years from the date of infusion of the capital," it said.

Also read: Will RBI increase Yes Bank withdrawal limit to above Rs 50,000?

NEW BOARD OF DIRECTORS

The RBI said that a new board will be constituted and the office of the Administrator appointed by the RBI will stand vacated. SBI will have two nominee directors on the board of Yes Bank and the RBI might appoint Additional Directors. The board members will remain in office for a period of one year or till an alternate board is constituted by Yes Bank.

WHAT HAPPENS TO THE EMPLOYEES?

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.

YES BANK BRANCHES

The RBI stated that all the offices and branches of Yes Bank will continue to function in the same manner and place as they are currently operating. It might look into opening new offices and branches or closing down existing offices and branches, in accordance with the extant policy.

Also read: YES Bank Crisis Live Updates: RBI announces restructure plan, Sitharaman seeks report, SBI expresses interest

Also read: Yes Bank crisis: 'I have no clue, have not been involved for 13 months,' says Rana Kapoor

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