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Investments in YES Bank aimed at providing stability, says SBI chief

SBI Card, the second largest largest credit card issuer in the country, got listed at 13 per cent discount at Rs 658 on the BSE, against the issue price of Rs 755.

Press Trust of India  |  Mumbai 

Rajnish Kumar
SBI Chairman Rajnish Kumar

SBI Chairman Rajnish Kumar on Monday said investments by in the crippled are being made to maintain financial stability in the system and not guided by the principle of return on investment (RoI).

The (SBI), along with seven other financial institutions, invested around Rs 10,000 crore in the crisis-hit last week, under the RBI-mandated reconstruction scheme.

"The decision of the SBI and all other coming together, it is not guided by the return on capital principles or investments. It is all guided by providing stability to the financial system," Kumar told reporters on the sidelines of the listing ceremony of SBI Cards and Payment Services at the BSE.

SBI Card, the second largest largest credit card issuer in the country, got listed at 13 per cent discount at Rs 658 on the BSE, against the issue price of Rs 755.

The scrip settled the day at Rs 683.20, up nearly 4 per cent. Last week, SBI invested Rs 6,050 crore in the troubled lender. It would hold up to 49 per cent stake in the private lender, with a minimum of 26 per cent over next three years.

ICICI Bank, Housing Development Corp Ltd, Axis Bank, Kotak Mahindra Bank, Bandhan Bank, and First also joined the SBI-led consortium and invested in

Mortage lender and invested Rs 1,000 crore each in Yes Bank. has invested Rs 600 crore by buying 60 crore shares and Kotak Mahindra Bank Rs 500 crore through 50 crore shares.

and put in Rs 300 crore each. First invested Rs 250 crore into the lender.

The government notified the Yes Bank Reconstruction Scheme 2020 late on last Friday. With that, the morotorium on the bank will be lifted by March 18.

The RBI had on March 5 put a moratorium on Yes Bank, restricting withdrawals to Rs 50,000 per depositor till April 3. It superseded the board of the troubled private sector lender and appointed Prashant Kumar as administrator.

Kumar will be the new CEO and MD of the bank.

Yes Bank declared its third quarter result on Saturday, posting a net loss of Rs 18,560 crore. Its gross non-performing assets surged to Rs 40,709 crore, which is 18.87 per cent of its gross advances.

Kumar Kumar said the response to SBI Card's IPO was phenomenal as it got over subscribed by 26.5 times. On the weak debut on the bourses, he blamed it on the current market mayhem and pointed the strong fundamentals of the SBI Card.

First Published: Mon, March 16 2020. 18:12 IST
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