As part of the reconstruction plan for the beleaguered private sector lender Yes Bank, there is placed a restriction on share sale or a lock in has been imposed for shareholders who held 100 or more shares of Yes Bank in their demat account. But notably, this restriction that is to the extent of 75% of all Yes Bank shares is applicable only for shares held up to March 13, 2020.
Why the Restriction on Share Sale or Lock-In for 3-years and What It Means?
This restriction on selling of Yes Bank shares is applicable to even new large investors (SBI and others) in the crisis ridden bank will enable share sale of just 25% of the total shareholding in Yes Bank for 3 years. Remember, here the lock in is not applicable to investors who have less than 100 shares of Yes Bank.
So, here to clear it if you have 100 shares of Yes Bank as on March 13, 2020, 75 shares are locked for 3 years and if you have 99 shares no shares are locked. The lock-in period will ensure the stability in the bank's core capital.
Also for fresh positions in the stock that is for Yes Bank shares that are purchased from March 16, 2020, there is no restriction in share sale and they will be available for sale freely. Hence, BTST trades will be allowed for Yes Bank shares that are bought from March 16, 2020.
The notification by the finance ministry said BTST (Buy Today Sell Tomorrow) trades will not be allowed in Yes Bank scrip. Thus shares bought on March 12 and March 13 cannot be sold by the traders or investors until and unless they get the delivery of the same in their demat account. And as per reports, clearing houses have not delivered the same as yet.
Note that because of the restriction from the finance ministry as shares cannot be debited from your account, in case you have sold shares of Yes Bank before 10 am on March 16, 2020, you will be required to buy the shares for squaring off the position on the same day for avoiding any auction.
Further, as per reports as there is less of volume available in the scrip as the clearing houses have not delivered the buy orders in the demat account of shareholders, the shares of Yes Bank have so far seen a phenomenal rally even in current weak markets.