Relief For Yes Bank Customers As Withdrawal Limit To End On Wednesday
The moratorium on withdrawals from crisis-laden Yes Bank will be lifted on Wednesday evening after the government notified the restructuring scheme proposed by Reserve Bank of India (RBI). "The order of moratorium on the reconstructed bank... shall cease to have effect on the third working day at 18:00 hours from the date of commencement of this Scheme," the government said.
Government issue Gazette notification following approval by Union Cabinet "Yes Bank Limited Reconstruction Scheme, 2020" yesterday.@nsitharamanoffc @RBI @DFS_India @PIB_India pic.twitter.com/wlGiD1FGX1
March 14, 2020"The notification shall come out and the moratorium shall cease on the third working day from the date of the notification, at 18:00 hours," Finance Minister Nirmala Sitharaman had said, earlier, on Friday.
The Reserve Bank of India (RBI) had placed Yes Bank under a moratorium earlier this month, took control of its board and imposed Rs 50,000-limit on withdrawals till April 3 following deterioration in the bank's financial position.
Finance Minister Nirmala Sitharaman had also announced on Friday that the Union Cabinet had approved Yes Bank's reconstruction scheme as proposed by Reserve Bank of India (RBI). "State Bank of India (SBI) will invest up to 49 per cent equity in Yes Bank and other investors are also being invited," the Finance Minister had said, addressing the media after a meeting of the Union Cabinet.
As part of the RBI-backed rescue plan for the troubled private sector lender, Yes Bank's authorised share capital will be revised upwards from Rs 1,100 crore to Rs 6,200 crore. The total number of equity shares will stand altered to 3,000 crore of Rs 2 each, aggregating Rs 6,000 crore. The authorised preference share capital shall continue to be Rs 200 crore.
SBI will acquire up to 49 per cent stake in Yes Bank and maintain a minimum holding of 26 per cent in the beleaguered bank for three years. All existing employees of Yes Bank will be retained as part of the deal. The restructuring scheme has also prescribed a lock-in period of three years for investors who hold more than 100 shares in the troubled bank.
The office of the administrator of YES Bank shall also stand vacated after seven days from the cessation of moratorium and the new Board will take over the bank. The government also appointed Prashant Kumar, former Chief Financial Officer and Deputy Managing Director of State Bank of India, as Chief Executive Officer and Managing Director.
The SBI board has approved a proposal to invest Rs 7,250 crore in Yes Bank by purchasing 7,250 million shares at Rs 10 apiece. Other banks have also lined up to buy stake in Yes Bank. HDFC and ICICI Bank will infuse Rs 1,000 crore each, Axis Bank Rs 600 crore and Kotak Mahindra Bank, Rs 500 crore, into Yes Bank.
Meanwhile, Yes Bank's founder and former managing director, Rana Kapoor, is in police custody after being arrested on money-laundering charges.
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