UNION Cabinet Okays RBI’s revival plan for YES BANK: FM Sitharaman

FINANCE Minister Nirmal Sitharaman said on Friday, 13 March 2020 that the Union Cabinet chaired by Prime Minister Narendra Modi has approved reconstruction scheme for Yes Bank under which State Bank of India will acquire 49 per cent stake in the crisis-ridden private sector bank. The scheme has been approved with the objective of protecting the interest of depositors and providing stability to Yes Bank as well as to the entire financial system, she added. The moratorium on the bank will be lifted within 3 days of notification of the reconstruction scheme, while its board will be in place in 7 days, she said. FM Sitharaman flanked by Minister of Environment, Forest and Climate Change and Minister of Information and Broadcasting Prakash Javadekar (R) and Minister of Railways and Commerce Piyush Goel briefed media about the cabinet decisions. On Thursday, SBI said it will invest Rs 7,250 crore in Yes Bank, which is much higher than Rs 2,450 crore it had planned initially for 49 per cent stake in the private sector lender that began operations in 2004. The Reserve Bank of India on March 5 imposed a moratorium on Yes Bank restricting withdrawals to Rs 50,000 per depositor till April 3.The RBI also superseded the board and placed it under an administrator, Prashant Kumar, former deputy managing director and CFO of Birdieing media about the scheme, FM Sitharaman said SBI will invest for 49 per cent equity in Yes Bank and other investors are also being invited. There will be three-year lock-in period for all the investors. However, the lock-in period for SBI would be only for the 26 per cent of the shareholding. The authorised capital of the lender has been increased to Rs 6,200 crore from Rs 1,100 crore.