State Bank of India is prepared to invest Rs 7,250 crore in Yes Bank. In a recent meeting, the Executive Committee of Central Board (ECCB) of the state-run lender approved purchase of 725 crore shares at Rs 10 per share. The purchase is subject to regulatory approval.
SBI has assured that its shareholding in Yes Bank will remain within the 49 per cent limit mandated in the reconstruction scheme for the beleaguered private lender.
"Executive Committee of Central Board (ECCB) at its meeting held on 11.03.2020 accorded approval for purchase of 725 crore shares in Yes Bank Ltd at a price of Rs 10 per share subject to all regulatory approvals. Our shareholding in Yes Bank Ltd. will remain within 49 per cent of the paid up capital of Yes Bank," SBI said in a filing to the stock exchanges.
SBI is expected to lead a consortium of lenders and financial institutions to buy stake in Yes Bank. The reconstruction scheme originally stated that 245 crore shares at Rs 10 per share would be issued to SBI for an investment of Rs 2,450 crore.
On March 5, the Reserve Bank of India (RBI) in consultation with the government put a moratorium on Yes Bank till April 3, citing serious financial mismanagement at the private sector lender. During the period, customers are not allowed to withdraw more than Rs 50,000. The central bank has also superseded the private lender's board and appointed former SBI CFO Prashant Kumar as administrator.
During the moratorium period, Yes Bank will not be able to grant or renew any loan or advance, make any investment, incur any liability, or agree to disburse any payment.