Yes Bank Moratorium To End: Rescue Plan Notified

Yes Bank Moratorium To End: Rescue Plan Notified

Yes Bank

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.

  1. 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.
  2. 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.
  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.
  4. 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.
  5. 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.
  6. 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.
  7. Prashant Kumar has been appointed as the CEO & MD of Yes Bank.
  8. Also, former non-executive chairman of Punjab National Bank Sunil Mehta is appointed as non- executive chairman.
  9. Mahesh Krishnamurthy and Atul Bheda are non-executive directors.
  10. The Banks who are investing shall nominate two officers as directors in addition new board, the notification said.

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