Govt notifies YES Bank rescue scheme; moratorium to be lifted on March 18
The union government on Saturday notified the YES Bank reconstruction scheme. In line with the scheme, the moratorium on the private lender will be lifted on March 18.
The government has also constituted a four-member board wherein Prashant Kumar, the current administrator of the bank, has been appointed as the managing director and the chief executive officer (MD&CEO) of the bank. Sunil Mehta, the former non-executive chairman of Punjab National Bank, has been appointed the non-executive chairman.
The other members of the board include Mahesh Krishnamurthy and Atul Bheda as non-executive directors. State Bank of India will nominate two members to the new board as directors and the Reserve Bank of India (RBI) may choose to appoint one or more persons as additional director(s) to the new board.
Meanwhile, Kolkata-based private sector lender Bandhan Bank has said it will invest Rs 300 crore in YES Bank under the reconstruction scheme and acquire 30 crore equity shares at Rs 10 each. Bandhan Bank joins a slew of private sector lenders who are investing in the revival of the troubled lender.
HDFC, Kotak Mahindra Bank, ICICI Bank, and Axis Bank are among the entities that have come to the rescue of troubled YES Bank. After State Bank of India’s commitment to invest Rs 7,250 crore, the YES Bank rescue plan will include an equity investment of Rs 3,100 crore from four private lenders. HDFC Ltd and ICICI Bank will invest Rs 1,000 crore each, Axis Bank will chip in with Rs 600 crore, and Kotak Mahindra Bank will put in Rs 500 crore in equity shares of YES Bank, according to the decisions taken by the respective boards on Friday.
The government notification also states that there shall be a lock-in period of three years and to the extent of 75 per cent of equity shares held by existing shareholders holding over 100 shares and private investors who have been allotted shares under the reconstruction scheme.
Earlier, the finance minister had said there will be a lock-in of three years of a part of the investments made by the private lenders in YES Bank. As much as 26 per cent of SBI’s equity investment and 75 per cent of the equity pumped in by other players will be retained in YES Bank for three years.