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SBI to buy 49% stake in Yes Bank under rescue plan; FM assures depositors

Analysts calculate SBI's investment in Yes Bank would need to total almost Rs 2,500 crore ($339.10 million).

Manoj Kumar Aftab Ahmed & Nupur Anand | Reuters  |  New Delhi/ Mumbai 

Photo- Dalip Kumar
Photo- Dalip Kumar

State Bank of India , the country's largest lender, will take a 49 per cent stake in Yes Bank, the Reserve Bank of India (RBI) said late on Friday as it laid out a plan for the rescue of the troubled private lender.

Finance Minister at a briefing in New Delhi on Friday said the restructuring plan would be implemented within 30 days.

The sharply increased Yes Bank's authorised share capital, paving the way for the bad-debt laden lender to receive a cash injection after it failed in its months-long attempt to raise enough money to meet regulatory requirements.

Based on details in the RBI's statement, analysts calculated that SBI's investment would need to total almost Rs 2,500 crore ($339.10 million). The and SBI have not given a figure.

SBI said on Thursday its board had given it an in-principle nod to explore an investment in Yes Bank, an about-turn after it had in December repeatedly denied it would play any role in aiding its competitor.

SBI's announcement came just hours after the took control of Yes Bank, saying it would work swiftly on a revival plan for the lender.

“I'm in continuous interaction with the Reserve Bank of India.

The central bank is fully seized of the matter and has assured they will give a quick resolution. I want to assure every depositor that their money shall be safe. Their monies are safe,” Sitharaman said earlier on Friday. Shares in Yes Bank, which fell as much as 85 per cent, closed 56 per cent lower on Friday.

First Published: Fri, March 06 2020. 19:42 IST