Advertisement
Monday, Nov 29, 2021
Outlook.com
Outlook.com

Cabinet Approves Yes Bank Reconstruction Scheme, Moratorium To Be Lifted After Official Notification

As part of the reconstruction process, SBI will invest for 49 per cent equity in Yes Bank

Cabinet Approves Yes Bank Reconstruction Scheme, Moratorium To Be Lifted After Official Notification
Yes Bank | File photo
Cabinet Approves Yes Bank Reconstruction Scheme, Moratorium To Be Lifted After Official Notification
outlookindia.com
2020-03-13T16:59:00+05:30

The Union Cabinet on Friday approved reconstruction scheme for Yes Bank under which SBI will acquire 49 per cent stake in the crisis-ridden private sector bank.

Finance Minister Nirmala Sitharaman said the Union Cabinet has approved the reconstruction scheme for Yes Bank as suggested by the Reserve Bank.

On March 5, the RBI imposed a moratorium on Yes Bank, restricting withdrawals to Rs 50,000 per depositor till April 3.

The RBI also superseded the board and placed it under an administrator, Prashant Kumar, former deputy managing director and CFO of SBI.

Giving details about the scheme, Sitharaman said SBI will invest for 49 per cent equity in Yes Bank and other investors are also being invited.

There will be a three year lock-in period for all the investors, she said. However, the lock-in period for SBI would be only for the 26 per cent of the shareholding.

The authorised capital of the lender has been increased to Rs 6,200 crore from Rs 1,100 crore, the finance minister said.

Sitharaman said the scheme has been approved with the objective of protecting the interest of depositors and providing stability to Yes Bank as well as to the entire financial system.

The moratorium on the bank will be lifted within 3 days of notification of the reconstruction scheme, while its board will be in place in 7 days, she said.

On Thursday, SBI said it will invest Rs 7,250 crore in Yes Bank, which is much higher than Rs 2,450 crore it had planned initially for 49 per cent stake in the private sector lender that began operations in 2004. 

Advertisement

Outlook Newsletters

Advertisement
Advertisement
Advertisement

Read More from Outlook

Heavy Fines, Media Gag: Maharashtra Learns From Past As It Gears To Tackle Omicron

Heavy Fines, Media Gag: Maharashtra Learns From Past As It Gears To Tackle Omicron

Maharashtra CM Uddhav Thackeray has instructed all the ministers in charge of the districts to tighten coordination with the local administration to ensure proper prevention of another Covid-19 outbreak.

Omicron Shows Why Countries Need To Start Sharing Their Vaccines

Omicron Shows Why Countries Need To Start Sharing Their Vaccines

'Despite the repeated warnings of health leaders, our failure to put vaccines into the arms of people in the developing world is now coming back to haunt us', wrote former British PM Gordon Brown.

IND Vs NZ, 1st Test, Live: India 9 Wickets Away From Victory

IND Vs NZ, 1st Test, Live: India 9 Wickets Away From Victory

Day 5 of the first India vs New Zealand Test is tantalisingly poised. India need nine wickets and New Zealand 280 runs. Follow here live cricket scores and updates of IND vs NZ.

Covid-19: Experts' Take On Omicron And Possibility Of Third Wave In India

Covid-19: Experts' Take On Omicron And Possibility Of Third Wave In India

Though the health experts and scientists in India have advised caution yet they feel that the current immune profile of the majority of the population in India makes them less vulnerable to Omicron as compared to any other country in the world.

Advertisement