The Union government has notified the YES Bank reconstruction scheme according to which the moratorium on the private sector lender will be lifted on March 18.
The notification states that there shall be a lock-in period of three years to the extent of 75 per cent of equity shares for investors holding over 100 shares and those who have been allotted shares under the reconstruction plan. The lock-in is effective from March 13. Investors holding less than 100 shares of YES Bank are exempted from this rule.
Earlier, Finance Minister Nirmala Sitharaman had said there would be a lock-in of three years of a part of the investments made by private lenders in YES Bank. As much as 26 per cent of State Bank of India’s (SBI’s) equity investment and 75 per cent of the equity pumped in by other players will be retained in YES Bank for three years.
The government vide the notification has constituted a four-member board wherein Prashant Kumar, the current administrator of the bank, has been appointed managing director (MD) and chief executive officer (CEO), and Sunil Mehta, former non-executive chairman of Punjab National Bank, non-executive chairman of the bank. The other members of the board are Mahesh Krishnamurthy and Atul Bheda as non-executive directors. SBI will nominate two members to the board as directors and the Reserve Bank of India (RBI) may choose to appoint one or more persons as additional director.
Moreover, the government has exempted SBI from complying with the norms of promoter holding for a period of four years under the Sub section (2) of Section 19 of the Banking Regulation Act.
According to the regulations, no banking company shall hold shares in any company, whether as pledge, mortgagee or absolute owner, of an amount exceeding 30 per cent of the paid-up share capital of that company or 30 per cent of its own paid-up share capital and reserves, whichever is less.
Prashant Kumar, the current administrator, will be MD & CEO, while Sunil Mehta will be non-executive chairmanBandhan, Federal Bank to invest Rs 300 cr each
Kolkata-based private sector lender Bandhan Bank has said it will invest Rs 300 crore in YES Bank under the reconstruction scheme of the RBI and acquire 300 million equity shares at Rs 10 each. Similarly, Federal Bank has informed the exchanges that it will invest Rs 300 crore in YES Bank for 300 million shares.
Bandhan and Federal Bank have thus joined a slew of private sector lenders that are investing in the troubled lender. While HDFC and ICICI Bank will invest Rs 1,000 crore each, Axis Bank will chip in with Rs 600 crore, and Kotak Mahindra Bank will put in Rs 500 crore, according to the decisions taken by the respective boards on Friday. SBI has already committed to investing Rs 7,250 crore.
According to information made public, YES Bank has got investment commitments of Rs 10,950 crore so far.
The government has also raised authorised capital of the bank over five times, from Rs 1,100 crore to Rs 6,200 crore.