Money & Banking

Reconstruction plan for YES Bank likely to be finalised soon

Surabhi Mumbai | Updated on March 11, 2020

Several foreign and domestic investors have evinced interest in picking up stake in crisis-hit private sector lender YES Bank

The reconstruction plan for private sector lender YES Bank is in its final stages and is likely to be announced by the Reserve Bank of India in the following days. According to sources close to the development, a number of foreign as well as domestic investors have evinced interest in picking up stake in the private sector lender.

Financial institutions, including several public and private sector banks, have also been approached to help recapitalise the bank as well as invest in deposit certificates of the bank. As part of the RBI’s draft reconstruction plan, State Bank of India has already expressed willingness to pick up a 49 per cent stake amounting to ₹2,450 crore. However, it will require much more capital, given that it had initially planned to raise ₹10,000 crore.

Sources said discussions are on between the Finance Ministry, RBI and SBI over the final reconstruction plan, which is likely to be announced soon. “The idea is to ensure that there is not only capital available with the bank but also liquidity so that when the moratorium is lifted it can be business as usual,” said sources close to the development.

RBI had placed YES Bank under a moratorium on March 5, and had also capped withdrawals at ₹50,000 per depositor.

YES Bank Administrator Prashant Kumar is hopeful that the moratorium on the lender will be lifted by March 14, and expects equity investments to be finalised even before that. On Wednesday, YES Bank scrip closed 35.53 per cent higher at ₹28.80 apiece on the BSE.

RTGS services

Meanwhile, the private sector lender also announced that inward RTGS services have been enabled. “Inward RTGS services have been enabled. You can make payments towards YES Bank credit card dues and loan obligations from other bank accounts,” it said in a tweet.

Published on March 11, 2020

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