InvestorQ : How is SBI planning to work out the rescue package for Yes Bank?
Katherine Gonsalves made post

How is SBI planning to work out the rescue package for Yes Bank?

Rutuja Nigam answered.
10 months ago

While the specifics of the SBI package are still being worked out, the broad contours are now made public. SBI has underlined that survival of Yes Bank was critical for the financial system and has agreed to invest Rs.2,450 crore right away. In addition, SBI is willing to also take this up to Rs.10,000 crore on the basis of due diligence and final valuation. Eventually, SBI will pick up a 49% stake in Yes Bank. SBI also added that the board will be recast and the new board will take any decision on forensic audit. The plan for restructuring is expected to be completely ready by April 03rd and till then the limit on depositors withdrawing only up to Rs.50,000 will continue. RBI has already superseded the board of the private sector lender, which is now being headed by former CFO of SBI; Prashant Kumar. Under the reconstruction scheme, Yes Bank’s authorized capital will be increased to Rs.5,000 crore from Rs.600 crore and paid-up capital will be enhanced to Rs.4,800 crore, comprising 2400 crore shares of Rs.2 face value. This marks a 10 times dilution of the capital base. SBI will pick up 49% stake in Yes Bank and cannot reduce the holding to below 26% before three years from the date of capital infusion.