Yes Bank revival plan: Moratorium will be lifted in three days, says FM Sitharaman

SBI to bailout Yes Bank as Cabinet approves restructuring plan   |  Photo Credit: IANS

New Delhi: In a significant step towards the restructuring of the cash strapped Yes Bank, the Union Cabinet on Friday (March 13) approved the State Bank of India led recovery plan. 

Addressing a media briefing, Finance Minister Nirmala Sithraman said that the reconstruction plan for Yes Bank is to primarily safeguard depositors and ensure stability in the financial system, adding SBI will invest up to 49% equity in Yes Bank while other investors are being sought.

Other than SBI, private sector lender ICICI Bank has shown interest to invest up to Rs 1,000 crore in Yes Bank for 100 crore shares at Rs 10 apiece and hold about a 5 per cent stake. Similarly, HDFC Bank and Axis Bank boards have approved to invest Rs 1,000 crore and Rs 600 crore respectively in the crisis-hit lender.

Kotak Mahindra Bank in an exchange filing today said that it will invest Rs 500 crore in Yes Bank to pick up 50 crore shares. 

She further added, SBI will have a 3-year lock-in period for 26 per cent of its equity in Yes Bank; other investors will have similar lock-in for 75% of equity.

The moratorium which was put on March 5 on Yes Bank will be lifted within 3 days of notification of the reconstruction scheme and the new Yes Bank board will be in place in 7 days, the finance minister added.

"Our board at its meeting yesterday has approved for an equity investment of up to Rs 10 billion in equity shares of Yes Bank, comprising up to 1 billion equity shares at a price of Rs 10 per share, under the proposed scheme of reconstruction of the bank," the ICICI Bank said in a statement.

Earlier, SBI had announced a Rs 7,250-crore fund infusion into the crippled Yes Bank under which it will pick up to 49 per cent equity in the troubled private sector lender. This fund infusion is part of the Reserve Bank-mandated rescue plan.

SBI said its shareholding in Yes Bank will remain within 49 per cent of the paid-up capital of the private lender and it will pick up to 725 crore shares at Rs 10 apiece.

"The executive committee of the central board at its meeting held on March 11 accorded approval for purchase of 725 crore shares of Yes Bank at a price of Rs 10 a share, subject to regulatory approvals," SBI said in an exchange filing on Thursday.

Yes Bank shares closed 2 per cent higher at Rs 25.55 apiece on Friday while shares of SBI, which witnessed the brunt of bailing out Yes Bank, closed 13.83 per cent higher at Rs 242. In intraday trade, SBI shares had fallen to a low of Rs 184.65 apiece.