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Business: SBI team working on Yes Bank rescue plan, depositors' money safe, says Chairman Kumar
State Bank of India's legal team has started due diligence as the public sector lender prepares to infuse Rs 2,450 crore to pick 49 per cent stake in the troubled private sector Yes Bank after being placed under administration by the Reserve Bank of India, SBI Chairman Rajnish Kumar said on Saturday.
Mumbai: State Bank of India's legal team has started due diligence as the public sector lender prepares to infuse Rs 2,450 crore to pick 49 per cent stake in the troubled private sector Yes Bank after being placed under administration by the Reserve Bank of India, SBI Chairman Rajnish Kumar said on Saturday.
Under the Yes Bank Ltd Reconstruction Scheme 2020 issued by the RBI a day earlier, the authorised capital for the reconstituted bank will be Rs 5,000 crore. The number of equity shares will also be altered to 24,000 crore of Rs 2 each aggregating to Rs 48,000 crore.
Also Read: Sitharaman assures Yes Bank depositors, says their money is safe
"The plan has been received by SBI and the legal team is working on the plan 24 x 7. We had informed through the stock exchange that SBI board has given in-principle approval of exploring the possibility of picking up a stake of up to 49 per cent in Yes Bank," said Kumar while addressing a press conference here.
He also assured Yes Bank's depositors that their money is safe. Kumar said SBI has been approached by many potential co-investors who saw an opportunity in Yes Bank and initial discussion have been held.
"There are many potential investors. After seeing the schemes, they have approached us. Any investor wanting to invest above 5 per cent will have to go through all regulatory norms of RBI," said Kumar.
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SBI will not reduce its holding below 26 per cent before completion of three years from the date of infusion of capital, according to the reconstruction plan.Kumar said the interests of SBI shareholders will not be compromised and there will be no impact on the bank's capital adequacy ratio. He said a new board of Yes Bank will be constituted with two nominees from SBI.The RBI has suspended Yes Bank's board and imposed a withdrawal limit of Rs 50,000 on its account holders till April 3.
Former SBI's Chief Financial Officer Prashant Kumar was appointed administrator of Yes Bank on Thursday. Yesterday, Finance Minister Nirmala Sitharaman said the restructuring plan for Yes Bank will be implemented within 30 days. (ANI)