SBI to pump in ₹7,250 cr for YES Bank rescue bid

MUMBAI: State Bank of India (SBI) on Thursday approved an investment of ₹7,250 crore in YES Bank Ltd, as part of a rescue plan for the troubled lender.

The executive committee of the board of India’s largest lender approved the purchase of 7.25 billion equity shares of YES Bank at ₹10 apiece, subject to regulatory approval.

SBI’s stake in YES Bank will remain within 49% of the paid-up capital of the bank, the state-run lender told stock exchanges.

Under the Reserve Bank of India (RBI)-supervised ‘YES Bank Ltd Reconstruction Scheme, 2020’, SBI is required to maintain at least 26% stake in YES Bank for a period of three years. SBI’s proposed plan was to invest a minimum of ₹2,450 crore to begin with and a maximum of ₹10,000 crore for 49% stake in the bank.

Separately, SBI is also in talks with domestic and foreign investors to infuse equity capital into the bank. Mint had reported on Thursday that HDFC Ltd and Kotak Mahindra

Prime will each invest ₹2,000 crore in YES Bank, according to a rescue plan prepared by SBI.

“The investors, including SBI, will bring a total of ₹12,000-15,000 crore worth capital in the first round of capital raising. The remaining capital requirement will be met through a qualified institutional placement post the bank’s results on March 14,” according to a banker aware of the matter.

On March 7, SBI chairman Rajnish Kumar said that as many as 23 investors had shown interest in investing in YES Bank. Those planning to invest more than 5% in the bank will have to come under the ‘fit and proper’ criteria formulated by RBI, he said.

Last week, RBI superseded the board of YES Bank and named Prashant Kumar as administrator to run its affairs after its financial position deteriorated. The regulator also capped deposit withdrawals up to ₹50,000 crore till 3 April.