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The Reserve Bank of India (RBI), on Friday, appointed R Gandhi (former Deputy Governor, RBI) and Ananth Narayan Gopalakrishnan (Associate Professor, SP Jain Institute of Management and Research) as additional directors on the board of YES Bank, which was rescued from an imminent collapse by eight financial intermediaries led by State Bank of India.
Their appointment is with effect from March 26 for two years. The central bank said these two appointments are as per the ‘YES Bank Reconstruction Scheme, 2020’ (notified by Government of India on March 13), and in exercise of powers conferred to it under the Banking Regulation Act, 1949.
Number of directors
With these appointments, the number of number of directors on the private sector bank’s board will increase to six. The bank’s board of directors has been reconstituted and currently comprises: Prashant Kumar (former Chief Financial Officer and Deputy Managing Director of State Bank of India)as Chief Executive Officer and Managing Director; Sunil Mehta (former Non-Executive Chairman of Punjab National Bank) as Non-Executive Chairman; Mahesh Krishnamurthy as Non-Executive Director; and Atul Bheda as Non-Executive Director.
As per the scheme, the members of the board, other than additional directors, can continue in office for one year, or until an alternate board is constituted by the reconstructed bank in accordance with the procedures laid down in its memorandum and articles of association, whichever is later.
YES Bank was recently rescued from an imminent collapse through an investment of ₹10,000 crore by eight financial investors, including State Bank of India (investment ₹6,050 crore), ICICI Bank and HDFC (₹1,000 crore each), Axis Bank (₹600 crore), Kotak Mahindra Bank (₹500 crore), Federal Bank and Bandhan Bank (₹300 crore each) and IDFC First Bank (₹250 crore).
The government, on an application made by the RBI, issued an order of moratorium on YES Bank from 6 pm on March 5up to and inclusive of April 3due to its rapidly deteriorating financial position related to liquidity, capital, and other critical parameters, and the absence of any credible plan for infusion of capital. Simultaneously, the RBI also issued directions, restricting deposit withdrawal to ₹50,000.
Following infusion of capital by the eight abovementioned financial intermediaries, the moratorium and directions on the bank were lifted with effect from March 18at 6 pm.
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