RBI inducts R Gandhi, Ananth Narayan as additional directors on Yes Bank board
BusinessToday.In March 20, 2020
Days after Yes Bank resumed full banking services, the Reserve Bank of India (RBI) on Friday appointed two additional directors on the board of the crisis-hit private lender. R Gandhi, former Deputy Governor, Reserve Bank of India, and Ananth Narayan Gopalakrishnan, Associate Professor, S P Jain Institute of Management and Research, have been appointed as additional directors on Yes Bank board with effect from March 26 for a period of two years, the central bank said in a statement.
As per the Yes Bank's reconstruction scheme, the RBI can appoint one or more persons as additional directors on the bank's board. The 'Yes Bank Reconstruction Scheme, 2020' was notified by the central government on March 13, 2020. The scheme followed the imposition of a moratorium on Yes Bank by the central government on March 5, 2020, to boost the bank's liquidity.
While the moratorium was initially slated to continue till April 3, 2020, it was lifted in 13 days, on March 18, 2020.
Under the reconstruction scheme, Yes Bank will receive an equity infusion of Rs 10,000 crore by 8 entities, mainly banks led by SBI, and the reconstitution of Yes Bank's board, with Prashant Kumar, former Deputy Managing Director and Chief Financial Officer of SBI, taking over as Managing Director and Chief Executive Officer.
SBI, the country's largest lender, has contributed over 60 per cent (Rs 6,050 crore) of the equity infusion of Rs 10,000 crore, thereby making it the single largest stakeholder in Yes Bank with a shareholding of 48.21 per cent.
Meanwhile, Yes Bank has planned a major fundraising programme under which it will raise up to Rs 20,000 crore from institutional players, including banks, through certificate of deposits (CDs). CRISIL has assigned its 'CRISIL A2' rating to the certificate of deposit programme on hopes of continued extraordinary systemic support from key stakeholders, including RBI, Ministry of Finance along with sizeable ownership of SBI.
By Chitranjan Kumar