SBI Shareholders, Depositors Need Not Worry About Its Yes Bank Investment: Chairman

Addressing a press conference on the rescue plan for Yes Bank, SBI Chairman Rajnish Kumar asserted that the public sector bank's shareholders and depositors' interest will be protected.

He asserted that any funds infused into the troubled private bank will be purely from an investment standpoint for SBI and SBI shareholders' interest would be fully protected.

"Depositors money is not at all at risk. Whatever is proposed, the interest of SBI shareholders will not be compromised," Kumar said.

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Shares of State Bank of India (SBI) have fallen over 15 percent in the last two trading days after news reports suggested that the public lender will take over Yes Bank.

Speaking on SBI's interest in making an investment in Yes Bank and participate in its reconstruction scheme, Kumar said that since a credible name was needed to assure the revival of the private lender, SBI has come forward.

He further said that there would be no conflict of interest in the Yes Bank investment as SBI would not be involved in in the day-to-day management of the private lender.

"SBI may or may not pick the entire 49 percent in the bank," Kumar said. He clarified that there will be no merger and it is hoped that SBI would get many co-investors to implement RBI's scheme. The public sector bank has received interests from some potential investors after seeing the investment scheme, Kumar said.

On Thursday, RBI placed Yes Bank Ltd under an order of moratorium up to 3 April 2020. The central bank also issued a draft 'Yes Bank Ltd. Reconstruction Scheme, 2020' wherein it said that SBI has expressed its willingness to make an investment in Yes Bank and participate in its reconstruction scheme.

The draft scheme proposes that SBI would have to hold a minimum of 26 percent stake in the reconstructed bank for a period of 3 years from the date of infusion of capital. It could hold a maximum of 49 percent shareholding in the reconstructed bank post-infusion at the minimum price of Rs 10 per share.

Kumar said that the extent of investment by SBI in Yes Bank will be informed to the exchanges by 9 March after the bank's internal investment and legal teams complete their due diligence on the private bank.