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State Bank of India (SBI) Chairman Rajnish Kumar said on Saturday said there are many investors, including domestic and foreign, willing to co-invest with it in Yes Bank to revive its fortunes.
Under a draft reconstruction scheme prepared by the RBI for the troubled Yes Bank, SBI is required to hold at least 26 per cent stake in the private sector lender for three years. The co-investors can hold up to 23 per cent.
Going by the scheme, SBI would invest between ₹2,450 crore and ₹10,000 crore in Yes Bank. This is based on the private sector bank’s capital requirement and the co-investors who will invest in it along with SBI.
If SBI goes solo and picks up 49 per cent stake then the immediate investment requirement is ₹2,450 crore, said Rajnish Kumar.
Investment plan
Emphasising that there are many potential investors ready to pick up stake in Yes Bank, Kumar said: “After seeing the scheme, they have approached us and there are some good names.”
“...Why investor interest? What I am seeing is that even in troubled institutions, whether it is a Non-Banking Finance Company or a Housing Finance Company or a bank, there is considerable investor interest in the financial sector of the country. So, investors are seeing an opportunity here.”
SBI’s investment team will discuss with the potential investors, work out the possibilities as per regulatory guidelines and then present an investment plan, involving these investors, to the regulator.
Kumar observed that depositors’ money is safe in Yes Bank. The interests of SBI shareholders will not be compromised, he added.
According to the SBI Chief, “SBI as a national institution having size and credibility.…A bank’s (small, medium or big) failure has huge consequences for the financial system and economy of the country.
“And today if a resolution has to happen…you need a credible name with the investors, creditors as well as the depositors of the (Yes) bank that SBI is standing behind itand that will ensure stability in the financial market. That is what I believe.”
Kumar felt that any enterprise, irrespective of the ownership, is a national asset. If it closes down, it is a huge loss to everyone -- employees and the ecosystem which an enterprise supports.
“We are very mindful of the interests of minority shareholders.
As far as SBI’s balance sheet, profit & loss account and shareholders are concerned, there is absolutely nothing to worry about.
“These calls -- whether it is loans, whether it is investments -- we take day in, day out. We do these loans and investments so that we get the desired returns. Many a times it happens and sometimes it doesn’t,” said Kumar.
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