InvestorQ : The Yes Bank CEO was mentioning that they will require more capital. Where will this additional capital come from?
Angel dcosta made post

The Yes Bank CEO was mentioning that they will require more capital. Where will this additional capital come from?

Answer
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Anamika Sodhani answered.
4 months ago


Yes Bank CEO, Prashant Kumar, has stated that the bank needs an additional Rs.8800 crore to bring the bank’s common equity Tier-1 (CET-1) capital to 10%. At that point, the bank will be better placed to absorb risks at the CET-1 currently stands at 6.3%. Surging bad loans wiped off a chunk of the lender’s capital and a new management could not revive the business. In early March, RBI had put together a rescue package of Rs.10,000 crore to protect the depositors, largely contributed by SBI and a clutch of other banks. Yes Bank has board approval to raise Rs.15,000 crore but market conditions make it a challenge to raise money. With gross NPAs at over 16%, it may just need more funding from the existing bank shareholders as confidence capital before outside equity can come in.