SBI board okays share purchase in Yes Bank for Rs 7,250 cr
New Delhi: The State Bank of India (SBI) on Thursday said that its Executive Committee of Central Board (ECCB) has approved the purchase of 725 crore shares in Yes Bank at Rs 10 per share, which adds up to an investment of Rs 7,250 crore.
In a regulatory filing, the bank said that its shareholding in the private lender will remain within 49 percent of the paid-up capital.
“Executive Committee of Central Board (ECCB) at its meeting held on 11.03.2020 accorded approval for the purchase of 725 crore shares in Yes Bank Ltd. at a price of Rs 10 per share subject to all regulatory approvals. Our shareholding in Yes Bank Ltd will remain within 49 percent of the paid-up capital of Yes Bank,” it said.
As per the Reserve Bank of India (RBI) draft reconstruction scheme for the crisis-hit private lender, the SBI will take up 49 percent in the bank.
Last week, the RBI placed Yes Bank under moratorium and capped the withdrawal limit at Rs 50,000 till April 3.
SBI Chairman Rajnish Kumar has said the moratorium may be lifted by the end of this week.
The RBI last week also superseded Yes Bank’s board of directors and appointed former SBI CFO Prashant Kumar as administrator.
The new board of directors will stand constituted from the appointed date. It will comprise a CEO and MD, non-executive chairman and non-executive directors. The SBI will have nominee directors appointed on the board of the reconstructed bank.
The RBI may appoint additional directors to the board, who shall continue in office for one year, or until an alternate board is constituted by Yes Bank.
The SBI will not reduce its holding below 26 percent before completion of three years from the date of the infusion of the capital.