After SBI, Private Banks Line Up To Buy Stakes In Yes Bank

piot8oo yes bank 625x300 06 March 20

Highlights

  • HDFC will buy 5 per cent stake in Yes Bank for Rs 1,000 crore.
  • Axis Bank will invest up to Rs 600 crore in Yes Bank for 60 crore shares
  • Kotak Mahindra Bank will invest Rs 500 crore to purchase 50 crore shares

The Union cabinet headed by Prime Minister Narendra Modi approved a rescue plan for Yes Bank, Finance Minister Nirmala Sitharaman said on Friday, as authorities look to prevent a broader banking crisis. The state-owned State Bank of India (SBI), the country’s largest lender, will take a 49 per cent stake in Yes Bank, the finance minister said.

Here are 10 things to know about Yes Bank’s rescue plan:

  1. ICICI Bank said it would invest up to Rs 1,000 crore for a 5 per cent stake in Yes Bank, which is the country’s fifth-largest private lender.

  2. Axis Bank, Kotak Mahindra Bank and country’s largest mortgage lender HDFC will also buy stakes in the troubled lender.

  3. Axis Bank will invest up to Rs 600 crore, it said in a regulatory filing after market hours while HDFC said that it will buy 5 per cent stake in Yes Bank for a total consideration of Rs 1,000 crore.

  4. Kotak Mahindra Bank said that it will invest Rs 500 crore in Yes Bank for buying 50 crore equity shares.

  5. “The decision to provide a reconstruction scheme keeps at its core the protection of depositors’ interest, keeps at its core providing stability to Yes Bank and also keeps at its core keeping a stable financial environment and banking system,” Ms Sitharaman told reporters in New Delhi.

  6. This month, the government placed Yes Bank under a moratorium because of a serious deterioration in its financial position.

  7. The moratorium, a move to reassure depositors by handing control to the central bank, would be lifted within three days once a government notification is issued, the minister said. She did not give a precise timeline.

  8. Private investors that join the rescue deal will need to maintain at least 75 per cent of their investments for a minimum of three years, she said.

  9. The Reserve Bank of India last week increased Yes Bank’s authorised share capital, paving the way for a cash injection.

  10. The authorised share capital of Yes Bank had now been hiked to Rs 6,200 crore from Rs 1,100 crore, Ms Sitharaman said.

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Author: ApnayOnline

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