Cabinet approves reconstruction scheme for Yes Bank; SBI to invest 49% equity in the Bank

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Business News

Mar 13, 2020

9:02PM

Cabinet approves reconstruction scheme for Yes Bank; SBI to invest 49% equity in the Bank

File Pic: PTI

The Union Cabinet has approved a reconstruction scheme for Yes Bank as proposed by the Reserve Bank of India. Giving details about the scheme after the Cabinet meeting, Finance Minister Nirmala Sitharaman said that State Bank of India will invest 49 percent equity in Yes Bank with other investors also being invited.

She said the scheme has been approved with the objective of protecting the interest of depositors and providing stability to Yes Bank as well as to the entire financial system. She said, the moratorium on withdrawals from Yes bank will be lifted within 3 days of notification of the reconstruction scheme, while its board will be in place in seven days. On the 5th of this month, the RBI imposed the moratorium, restricting withdrawals to 50 thousand rupees per depositor till the 3rd of April.

She also said that there will be a three year lock-in period for all the investors but in case of SBI, the lock-in period would be only for 26 percent of the shareholding. She also said that authorised capital of the lender has been raised from 1100 crore rupees to 6200 crore rupees to accommodate immediate and subsequent raising of capital requirements.