The Reserve Bank of India on Friday (6 March) put out the draft of a revival scheme for Yes Bank, which has been put under the control of the central bank.
India's biggest bank SBI has expressed its willingness to make investment in Yes Bank and participate in its reconstruction scheme, the RBI said.
The RBI invited suggestions and comments from members of public, including the banks' shareholders, depositors and creditors on the draft scheme. The draft has also been sent to Yes Bank and the SBI for their comments. The RBI will receive suggestions up to Monday (9 March) and thereafter, take a final view.
The other points of the draft are that all deposits with Yes Bank will continue in the same manner and with the same terms and conditions, completely unaffected by the scheme. Authorised capital shall stand altered to Rs 5,000 crore and number of equity shares will stand altered to Rs 2,400 crore of Rs 2 each.
The investor bank shall agree to invest in the equity of reconstructed Yes Bank to the extent that post infusion, it holds 49 per cent shareholding in the reconstructed bank at a price not less than Rs 10 (face value of Rs 2) and premium of Rs 8.
The investor bank shall not reduce its holding below 26 per cent before completion of three years from the date of infusion of the capital into Yes Bank. The board of directors of reconstructed Yes Bank will however, have the freedom to discontinue the services of the key managerial personnel (KMPs) at any point of time after following due procedure.
The offices and branches of reconstructed Yes Bank will continue to function in the same manner and at the same places they were functioning prior to the effective date, without in any way being affected by this scheme.
The RBI said it will be open to the reconstructed Yes Bank to open new offices and branches or close down existing offices or branches, in accordance with the extant policy of the central bank.
From the appointed date, the office of the administrator of Yes Bank, appointed by the Reserve Bank, shall stand vacated, and a new board will be constituted.
The investor bank shall have two nominee directors appointed on the board of the reconstructed Yes Bank, while the RBI may appoint additional directors on the board.
It will be open to the board of directors of Yes Bank to co-opt more directors.
All the employees of reconstructed Yes Bank shall continue in its service with the same remuneration and on the same terms and conditions of service, including terms of determination of service and retirement, as were applicable to such employees immediately before the appointed date, at least for a period of one year.
The story has been published via a syndicated feed, only the headline has been changed
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