NEW DELHI: State of Bank of India (SBI) chairman Rajnish Kumar on Saturday said that the bank has received the draft scheme of resolution for cash-strapped Yes Bank and the board has given in-principle approval to explore the possibility of picking up 49 per cent stake.
"Plan has been received by SBI and the legal team is doing due diligence of the draft scheme. We had informed through the stock exchange that SBI board has given in-principle approval of exploring possibility of picking up a stake of up to 49% in Yes Bank," the SBI chief noted.
SBI has time till Monday (March 9) to respond to RBI (Reserve Bank of India) on the draft scheme.
Assuring that the depositor's money is safe, the SBI chief added that many potential investors have approached SBI after seeing the draft scheme.
A day after imposing moratorium on Yes Bank and restricting withdrawals to Rs 50,000 per depositor till April 3, the Reserve Bank of India (RBI) on Friday evening issued a draft reconstruction scheme for the private sector lender and said SBI has "expressed its willingness" to make an investment.
As per the 'Yes Bank Ltd Reconstruction Scheme, 2020', the strategic investor bank will have to pick up 49 per cent stake and it cannot reduce holding to below 26 per cent before three years from the date of capital infusion.
From the appointed date, the authorised capital of the private sector bank would stand altered to Rs 5,000 crore and the number of equity shares at 2,400 crore having face value of Rs 2 each.
Kumar said the effort will be that the resolution plan is approved and implemented before the timeline set by the RBI. He also said the proposed plan will not have any impact on SBI's balance sheet.
"There is a very marginal impact on bank's capital adequacy ratio. As a policy, we maintain all ratios 50 basis points above the minimum regulatory requirement. We will continue to do that without any further raising of the capital from the market and there is no question of requesting the government for any capital," he said.
Even the interest of SBI's shareholders will not be compromised under the plan, he said. SBI's investment in the private sector lender will not lead to conflict of interest, he said.
(With agency inputs)
In Video:Yes Bank crisis: SBI board has given in-principle approval to buy 49% stake, says chief Rajnish Kumar
"Plan has been received by SBI and the legal team is doing due diligence of the draft scheme. We had informed through the stock exchange that SBI board has given in-principle approval of exploring possibility of picking up a stake of up to 49% in Yes Bank," the SBI chief noted.
SBI has time till Monday (March 9) to respond to RBI (Reserve Bank of India) on the draft scheme.
Assuring that the depositor's money is safe, the SBI chief added that many potential investors have approached SBI after seeing the draft scheme.
A day after imposing moratorium on Yes Bank and restricting withdrawals to Rs 50,000 per depositor till April 3, the Reserve Bank of India (RBI) on Friday evening issued a draft reconstruction scheme for the private sector lender and said SBI has "expressed its willingness" to make an investment.
As per the 'Yes Bank Ltd Reconstruction Scheme, 2020', the strategic investor bank will have to pick up 49 per cent stake and it cannot reduce holding to below 26 per cent before three years from the date of capital infusion.
From the appointed date, the authorised capital of the private sector bank would stand altered to Rs 5,000 crore and the number of equity shares at 2,400 crore having face value of Rs 2 each.
Kumar said the effort will be that the resolution plan is approved and implemented before the timeline set by the RBI. He also said the proposed plan will not have any impact on SBI's balance sheet.
"There is a very marginal impact on bank's capital adequacy ratio. As a policy, we maintain all ratios 50 basis points above the minimum regulatory requirement. We will continue to do that without any further raising of the capital from the market and there is no question of requesting the government for any capital," he said.
Even the interest of SBI's shareholders will not be compromised under the plan, he said. SBI's investment in the private sector lender will not lead to conflict of interest, he said.
(With agency inputs)
In Video:Yes Bank crisis: SBI board has given in-principle approval to buy 49% stake, says chief Rajnish Kumar
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