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Yes Bank board to consider fundraising plan later this week

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Business Finance

Press Trust of India  |  New Delhi 

Yes Bank on Monday said its board will consider a proposal to raise funds via equity and bonds, at its meeting later this week.

"The meeting of the board of directors of Yes Bank Ltd is scheduled for Thursday, March 26, 2020, at Mumbai to consider, amongst other agenda items, a proposal for raising funds by issue of equity shares/ depository receipts/ convertible bonds/ debentures/ warrants/ any other equity-linked securities, through permissible modes," it said in a BSE filing.

The fundraising plan will also include a qualified institutions placement, rights issue, and further public offer, among others, subject to such approvals, the bank added.

The lender has already raised over Rs 10,000 crore from SBI and other key banks and financial institutions through sale of equity under its reconstruction plan approved by the government and the Reserve Bank of India (RBI).

Additionally, the RBI has also extended a Rs 60,000-crore credit line to Yes Bank for meeting obligations, as per sources.

According to Section 17 of the Reserve Bank of India Act, 1934, the central bank can provide liquidity support to any lender in the form of loans and advances against collateral such as stocks, funds and securities (other than immovable property) in which a trustee is authorised to invest trust money by an Act of Parliament.

According to the sources, the RBI's assessment found that Yes Bank had liquidity issues but no solvency problem or any other issue. The line of credit, however, is first such exercise by the central bank.

After witnessing decent recovery since the RBI superseding its board and planning out the reconstruction scheme, the stock of the bank closed over 13 per cent down at Rs 39.75 apiece on the BSE due to the coronavirus pandemic gripping the markets globally.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, March 23 2020. 18:02 IST
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