Reserve Bank of India (RBI) has launched “Yes Bank Ltd. Reconstruction Scheme, 2020″, to save Yes bank from defaulting and shutting down. RBI will be supervising the rescue scheme. As a part of the scheme, State Bank of India (SBI) will be purchasing 7.25 billion equity shares of Yes Bank at Rs. 10 each, subject to the approval by SEBI and other regulatory bodies. The purchase of the shares has been approved by the executive committee of the board of SBI. The stake of SBI in Yes bank will remain within 49% of the paid-up capital of the bank and SBI will have to maintain a minimum of 26% stake for three years.
Last Thursday, SBI has finalized to invest Rs. 7,250 crores towards “Yes Bank Ltd. Reconstruction Scheme, 2020”. SBI had initially planned to incrementally invest in Yes Bank Ltd., starting from Rs. 2,450 crores and capping the investment at Rs. 10,000 crores for a stake of 49% in the troubled bank. SBI is also arranging fund infusion by the equity capital route from domestic and foreign investors. It has been reported that HDFC and Kotak Mahindra Prime are planning to invest Rs. 2000 crores each in the Yes Bank rescue scheme.
According to an experienced banker, the first round of capital raising will see a total investment of Rs. 12000 to Rs. 15000 crores. He further says that the remaining capital requirement shall be met through a qualified institutional placement, after the RBI’s decision on Yes bank on 14th March.