The government has notified the reconstruction scheme for capital-starved Yes Bank. In a notification, the Finance Ministry says that the restrictions on withdrawals from its accounts up to ₹50,000 will be lifted in “three working days,” The salient features of the plan are as under.
- The order of moratorium on the reconstructed bank shall cease to have effect on the third working day at 18:00 hours from the date of commencement of this Scheme.
- After placing the crisis-hit YES Bank under a moratorium, the Reserve Bank of India the banking regulator took control of the Yes Bank board and imposed a withdrawal limit from the bank accounts till April 3.
- According to RBI-backed rescue for the troubled lender, State Bank of India will acquire up to 49% stake in Yes Bank. On 12th March 2020 SBI board approved a proposal to invest ₹7,250 crore in Yes Bank by purchasing 7,250 million shares at ₹10 apiece.
- According to the proposal, HDFC and ICICI Bank will infuse ₹1,000 crore each, Axis Bank ₹600 crore and Kotak Mahindra Bank (KMB) Ltd ₹500 crore into Yes Bank.
- The state-run lender cannot reduce its holding below 26% before for the next three years while other investors will be subject to a three-year lock in period for 75% of their investment, the notification mentioned.
- The Government notification also adds that Yes Bank’s authorised share capital will be revised upwards from ₹1,100 crore to ₹6,200 crore. The number of total equity shares will stand altered to 3,000 crore of ₹2 each.
- Prashant Kumar has been appointed as the CEO & MD of Yes Bank.
- Also, former non-executive chairman of Punjab National Bank Sunil Mehta is appointed as non- executive chairman.
- Mahesh Krishnamurthy and Atul Bheda are non-executive directors.
- The Banks who are investing shall nominate two officers as directors in addition new board, the notification said.
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