RBI announces 'reconstruction scheme' of Yes Bank, SBI likely to pick up 49% stake

According to the draft scheme, the authorised capital of Yes Bank will stand altered to Rs 5,000 crore only and number of equity shares will stand altered to 2,400 crore of Rs 2 each from the appointed date.

RBI announces 'reconstruction scheme' of Yes Bank, SBI likely to own 49% stake as

The Reserve Bank of India on Friday put out a draft scheme of reconstruction of Yes Bank with State Bank of India likely to pick up 49% stake.



This comes a day after the RBI imposed a moratorium on the troubled private lender on March 5, 2020 which will be effective up to April 3, 2020. The withdrawal limit has been capped at Rs 50,000 owing to the financial position of the bank.


Releasing a draft scheme of reconstruction, the RBI has invited suggestions and comments from members of public, including the banks' shareholders, depositors and creditors on the draft scheme. The draft scheme has also been sent to Yes Bank and SBI for their comments.

According to RBI, SBI has expressed its willingness to invest in Yes Bank and participate in its reconstruction scheme. SBI will have to pick up 49% stake in Yes Bank and stay invested for at least three years, as per the RBI's draft scheme of reconstruction.


According to the draft scheme, the authorised capital of Yes Bank will stand altered to Rs 5,000 crore only and number of equity shares will stand altered to 2,400 crore of Rs 2 each from the appointed date.


The investor bank, SBI, will agree to invest in the equity of the reconstructed bank to the extent that post infusion it holds 49% shareholding in the private lender at a price not less than Rs 10 (Face value of Rs 2) and premium of Rs 8.

The investor bank will not reduce its holding below 26% before completion of three years from the date of infusion of the capital, said the draft on which comments from stakeholders have been invited till March 9. The investor bank will also have two nominee directors appointed on the Board of the reconstructed bank.

All the employees of the reconstructed lender will continue in its service with the same remuneration and on the same terms and conditions of service (T&C), including terms of determination of service and retirement, as were applicable to such employees immediately before the Appointed date, at least for a period of one year, the scheme said.


Board of Directors of the reconstructed bank will, however, have the freedom to discontinue the services of the Key Managerial Personnel (KMPs) at any point of time after following the due procedure, it said.

The offices and branches of the Reconstructed bank will also continue to function in the same manner and at the same places they were functioning prior to the effective date, without in any way being affected by this scheme.

It will be open to the Reconstructed bank to open new offices and branches or close down existing offices or branches, in accordance with the extant policy of the Reserve Bank and complying with the necessary terms and conditions.