The Reserve Bank of India’s (RBI’s) revival plan for YES Bank will need the central government's approval, which may come in by Friday, according to a government official.
The draft ‘YES Bank Ltd Reconstruction Scheme, 2020’ will be put up for the approval of the Union Cabinet, chaired by Prime Minister Narendra Modi, when it meets on Friday, the official said.
The RBI had made the draft reconstruction scheme public on Friday, a day after it took over the board of the troubled lender and imposed restrictions on lending and withdrawal activities. The RBI had invited comments from State Bank of India (SBI), which is expected to hold 49 per cent stake in YES Bank, and other stakeholders by Monday.
After examining comments on the draft scheme, the RBI may modify the provisions and send it for the approval of the central government. According to the Banking
Regulation Act, 1949, the Centre can approve the scheme without any modifications or with some changes “as it may consider necessary”.
The scheme will come into force from the date as specified by the central government and there may be “different dates for different provisions of the scheme”, according to the law.