Day after Reserve Bank of India (RBI) released a draft reconstruction plan for the crisis- hit private sector bank Yes Bank indicating that the state-owned State Bank of India (SBI) will be part of rescue operation, SBI Chairman Rajnish Kumar provided further details of the fund infusion plans that is being considered by his investment team.
Kumar said it SBI plans to immediately provide ₹2,450 crore to Yes Bank and over a period of time infuse over ₹10,000 crore in total depending on the outcome of due diligence and valuation process.
Kumar said that "RBI will increased authorised equity shares to 2,400 crore for face value of Rs 2 each, which brings the authorised capital to 4,800 crore. If we presume that SBI takes on 49 percent stake that would be 245 crore shares at Rs 10, which would put immediate investment requirement at Rs 2,450 crore."e and final valuation.
Ruling out any merger, Kumar emphasised that 26 percent stake is the "lock-in requirement" and thus obligatory, adding that 49 percent is the upper limit approved by the bank board "in-principal".
"Only requirement is the lock of 26 percent for three years, This sets the boundary. This is obligation, anything above that would be requirement and would depend on what others invest," he said.
Kumar said that even if SBI invests around ₹10,000 crore in the private sector lender, it will have a minor impact on SBI's regulatory capital requirement.
The draft reconstruction scheme was released a day after the RBI moved to imposed moratorium on Yes Bank, restricting withdrawals to ₹50,000 per depositor till April 3.
RBI also superseded the board of the private sector lender, which is now being headed by former deputy managing director and chief financial officer of SBI Prashant Kumar.
As per the draft ‘reconstruction scheme’, Yes Bank’s authorized capital will be increased to ₹5,000 crore from ₹600 crore and paid-up capital will be enhanced to ₹4,800 crore, comprising 2400 crore shares of ₹2 face value. This will be effective from the day the government notifies the scheme in the Gazette. Currently, there are 2.55 billion fully paid-up shares issued, totalling ₹510 crore.
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