SBI board okays share purchase in Yes Bank for INR 7,250 cr.

New Delhi, March 12 (IANS): 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 INR 10 per share, which adds up to an investment of INR 7,250 crore.

In a regulatory filing, the bank said that its shareholding in the private lender will remain within 49 per cent of the paid up capital.

“Executive Committee of Central Board (ECCB) at its meeting held on 11.03.2020 accorded approval for purchase of 725 crore shares in Yes Bank Ltd. at a price of INR 10 per share subject to all regulatory approvals. Our shareholding in Yes Bank Ltd will remain within 49 per cent 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 per cent in the bank.

Last week, the RBI placed Yes Bank under moratorium and capped the withdrawal limit at INR 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The RBI last week also superseded Yes Bank’s board of directors and appointed former SBI CFO Prashant Kumar as administrator.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 per cent before completion of three years from the date of infusion of the capital.