Union Cabinet approves Yes Bank reconstruction scheme

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SBI to invest in 49 % stakes, ICICI bank to invest 100 cr & HDFC board also investing

New Delhi, March 13 The Union Cabinet on Friday approved a reconstruction plan for cash-strapped Yes Bank, under which the State Bank of India will pick up 49 per cent of the equity, while private investors will be allowed to buy the rest.

According to Finance Minister Nirmala Sitharaman, the Cabinet decided that the SBI will hold at least 26 per cent stake in the private bank for a minimum period of three years. Similarly, the other investors will also be mandated to have a similar lock-in period for 75 per cent of their investment in the bank.

The authorised share capital of the Yes Bank will be revised upwards from Rs 1,100 crore to Rs 6,200 crore.

Besides, Sitharaman indicated that the details of the scheme will be notified soon.

She further said that Yes Bank’s moratorium will be lifted at 16.00 hours, after three working days of the scheme being notified.

The office of the administrator shall also stand vacated after seven days from the cessation of moratorium and the new Board will take over the bank.

Prashant Kumar, former SBI CFO, is the current administrator.

In addition, she said, the new Board will have two members from the SBI.