RBI Announces Rescue Plan For Yes Bank; SBI Can Hold 49% Stake
The Reserve Bank of India (RBI) on Friday released a draft 'Yes Bank Ltd. Reconstruction Scheme, 2020.'
"The Reserve Bank invites suggestions and comments from members of the public, including the banks' shareholders, depositors and creditors on the draft scheme," the central bank said in a statement.
"The suggestions and comments will be received by Reserve Bank of India up to Monday, March 9, 2020," it further said.
RBI placed Yes Bank Ltd under an order of moratorium on Thursday will be effective up to 3 April 2020.
Share Capital
RBI said that the State Bank of India has expressed its willingness to make an investment in Yes Bank and participate in its reconstruction scheme.
The draft proposes the share capital of the restructured bank to stand altered to Rs 5,000 crore and the number of equity shares to 2,400 crore of Rs 2 each aggregating to Rs 4,800 crore.
SBI, being the "Investor bank" shall agree to invest in the equity of the Reconstructed bank to the extent that post infusion it holds 49 percent shareholding in the Reconstructed bank at a price not less than Rs 10 (Face value of Rs 2 and premium of Rs 8, according to the draft scheme.
"The Investor bank shall not reduce its holding below 26% before completion of three years from the date of infusion of the capital," it added.
Employees
Employees of Yes Bank are proposed to continue receiving the same benefits at least for a year.
"All the employees of the Reconstructed bank shall continue in its service with the same remuneration and on the same terms and conditions of service (T&C), including terms of determination of service and retirement, as were applicable to such employees immediately before the Appointed date, at least for a period of one year," the draft said.
Bank Branches
The existing offices and branches of Yes Bank will continue to function in the same places. It will be allowed for the Restructured Bank to "open new offices and branches or close down existing offices or branches, in accordance with the extant policy of the Reserve Bank and complying with the necessary terms and conditions."
How to share your suggestions on the draft reconstruction scheme?
The suggestions or objections on the draft scheme may be sent to:
The Chief General Manager, Department of Regulation, Reserve Bank of India, Central office, 13th Floor, Central Office Building, Shahid Bhagat Singh Marg, Fort, Mumbai - 400 001
Email address: [email protected]