ICICI Bank to infuse Rs 1,000 cr in Yes Bank as part of bailout plan

ICICI Bank on Friday said it will invest Rs 1,000 crore in Yes Bank as part of the RBI's reconstruction plan for the crisis-hit lender.

The decision was taken at ICICI Bank's board meeting held on Thursday.

"The Board... accorded approval for an equity investment of up to Rs 10 billion in equity shares of Yes Bank Limited, comprising up to 1 billion equity shares at a price of Rs 10 per share, under the proposed Scheme of Reconstruction of Yes Bank Limited under the Banking Regulation Act, 1949, subject to regulatory and government approval," ICICI Bank said in a regulatory filing.

This investment will result in ICICI Bank Ltd holding in excess of 5 per cent shareholding in Yes Bank, with the final shareholding to be determined based on the final Scheme of Reconstruction and share issuance thereunder, it added.

The RBI superseded Yes Bank's board on March 5 and put the lender under a moratorium, restricting withdrawals to Rs 50,000 per account till April 3.

Finance Minister Nirmala Sitharaman on Friday said the moratorium will be lifted in three days.

On the cost of acquisition of shares in Yes Bank, ICICI Bank said it is for cash consideration of Rs 10 billion wherein it will acquire 1 billion equity shares of face value of Rs 2 at a premium of Rs 8 per share.

ICICI Bank also clarified that this is not a related party transaction.

Total assets of Yes Bank Ltd stood at Rs 3,46,576 crore as end of September 2019. The bank posted a net loss of Rs 486 crore for the first half ended September of the current fiscal year on a total income of Rs 17,421 crore.

Yes Bank will on Saturday (March 14) announce its third quarter results, which was delayed amid the bank's capital raising plans.

As per the RBI approved reconstruction plan for Yes Bank, the country's largest lender SBI will pick-up 49 per cent stake in the cash-strapped private sector lender by infusing Rs 7,250 crore.

Also, SBI will have to maintain at least 26 per cent shareholding for three years.

Briefing reporters after the cabinet meeting here, Sitharaman said the reconstruction scheme keeps at its core the protection of depositors' interest, providing stability to Yes Bank and keeping a stable financial environment and banking system.

Stock of ICICI Bank closed at Rs 447.45 on BSE, up 5.28 per cent from the previous close.