On March 5, the RBI imposed a moratorium on Yes Bank. (Photo Credit: Representative image)
The Union Cabinet on Friday approved reconstruction scheme for Yes Bank under which the SBI will acquire 49 per cent stake in the crisis-ridden private sector bank. Finance Minister Nirmala Sitharaman said the Union Cabinet has approved the reconstruction scheme for Yes Bank as suggested by the Reserve Bank. On Thursday, the SBI said it will invest Rs 7,250 crore in Yes Bank, which is much higher than Rs 2,450 crore it had planned initially for 49 per cent stake in the private sector lender that began operations in 2004.
On March 5, the RBI imposed a moratorium on Yes Bank, restricting withdrawals to Rs 50,000 per depositor till April 3. The RBI also superseded the board and placed it under an administrator, Prashant Kumar, former deputy managing director and CFO of SBI.
Giving details about the scheme, Sitharaman said SBI will invest for 49 per cent equity in Yes Bank and other investors are also being invited.
Total assets of Yes Bank Ltd stood at Rs 3,46,576 crore as end of September 2019. The bank posted a net loss of Rs 486 crore for the first half ended September of the current fiscal year on a total income of Rs 17,421 crore. Yes Bank will on Saturday (March 14) announce its third quarter results, which was delayed amid the bank's capital raising plans.
Kotak Mahindra Bank: The positive test comes after Bolsonaro’s press secretary was found to have the disease following a trip to the US. His son Eduardo Bolsonaro, a congressman who was also on the trip, tweeted that his father “is not exhibiting any signs of the disease” Bolsonaro dined with Donald Trump at Mar-a-Lago on Saturday night and videos and photos, including some on Wajngarten’s own Instagram account, showed the press secretary, Bolsonaro and Trump all in close proximity. “I’m not concerned,” Trump told reporters on Thursday. Bolsonaro has downplayed the crisis. On Wednesday, he said “Other flus kill more than this” and has also called concern over coronavirus “oversized”.
HDFC Bank: The mortgage lender will invest Rs 1,000 crore into Yes Bank for an equity stake. “The Corporation is investing in 100 crore equity shares of Rs 2 each of Yes Bank for a consideration of Rs 10 per share (including Rs 8 premium) for an aggregate consideration of Rs 1,000 crore," HDFC Ltd said in a regulatory filing.
This investment is likely to result in the Corporation (Housing Development Finance Corporation) holding in excess of 5 per cent shareholding in Yes Bank, with the final shareholding to be determined based on the final Scheme of Reconstruction and share issuance thereunder, it said.
HDFC said the investment deal is to happen for a cash consideration and is expected to be completed by March 31, 2020.
ICICI Bank: The bank said it will invest Rs 1,000 crore in Yes Bank. The decision was taken at ICICI Bank's board meeting held on Thursday. "The Board... accorded approval for an equity investment of up to Rs 10 billion in equity shares of Yes Bank Limited, comprising up to 1 billion equity shares at a price of Rs 10 per share, under the proposed Scheme of Reconstruction of Yes Bank Limited under the Banking Regulation Act, 1949, subject to regulatory and government approval," ICICI Bank said in a regulatory filing.
This investment will result in ICICI Bank Ltd holding in excess of 5 per cent shareholding in Yes Bank, with the final shareholding to be determined based on the final Scheme of Reconstruction and share issuance thereunder, it added.
ICICI Bank also clarified that this is not a related party transaction.
Axis Bank: The Axis Bank said it will invest up to Rs 600 crore in Yes Bank for up to 60 crore shares as part of the reconstruction plan for the cash-strapped peer lender. "The Board of Directors of Axis Bank Ltd at its meeting held today has accorded approval to invest a sum of up to Rs 600 crore for acquiring up to 60 crore equity shares of Rs 2 each of Yes Bank Limited, for cash, at a premium of Rs 8 per equity share, under the proposed Scheme of Reconstruction of Yes Bank Limited under the Banking Regulation Act, 1949," Axis Bank said in a regulatory filing.
(With PTI inputs)