SBI to pump in ₹7,250 crore for YES 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Last week, RBI superseded the board of YES Bank and named Prashant Kumar as administrator to run its affairs after its financial position deteriorated.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.

According to a report by Jpmorgan on March 5, YES Bank will require as much as ₹17,500-21,000 crore in capital. “Taking a conservative view of the stressed pool at YES Bank (₹45,000-50,000 crore), we believe the net worth (₹27,000 crore) can buffer most of the losses realized from the stress book at the bank. However, capital will still be required to recapitalize it, which in our view could be $2.5-3 billion if AT1 is not converted,” the report said.

“We believe SBI’S ₹7,250 crore equity commitment to YES Bank is based on the Q3 internals, due diligence already done, and likely equity commitments from investors that SBI chairman alluded to in his press conference. Hence, there could be a matching or higher equity investment from non-sbi investors. It may be noted that YES Bank’s sub-investment grade book in Q2FY20 stood at ₹31,400 crore or 88% of its Tier 1 capital. Hence, although the planned equity infusion appears meaningful, whether it would suffice would be known once the bank presents its Q3 results,” said Ravikant Anand Bhat, an analyst at Indianivesh Fund Managers Pvt Ltd.

The minister said that hate speeches began soon after the CAA was passed in December.

In his address, a day after his detailed reply to a similar debate in the Lok Sabha, Shah said 1,922 people had been identified as participating in the riots -- 336 of these from Uttar Pradesh -- with the help of facial recognition software, but asserted that the government had breached no privacy laws. He also said that only voter identity cards and driver’s licences were used, not Aadhaar details.

“These characters were seen rioting, stone pelting and killing. Homes were burnt, livelihoods and lives lost… Police should have the right to produce rioters in court, based on transparent and scientific probe,” he said.

“We haven’t violated any Supreme Court guidelines.”

He announced that three special investigation teams were probing 50 serious crimes, such as murder, arson and looting, and that 40 teams were formed to catch the people identified by the facial recognition software. “They are speaking to neighbours, going to their homes and tracing their phones to arrest them,” he said.

Shah repeated the allegation that money was funnelled from abroad to instigate the riots, and said five people were arrested for allegedly distributing money before the violence. He also said the Delhi chief justice was asked to name a judge to adjudicate claims for compensation. “There should be no doubt that the Narendra Modi government is taking up the probe in a transparent, speedy manner,” he said.

The home minister said social media accounts were opened only to channel incendiary content. He dismissed charges that the government dithered in calling in the army, saying no such suggestion was made at a high-level meeting on February 25.

He also defended the transfer of former Delhi high court judge S Muralidhar to the Punjab and Haryana high court, saying the decision was made by the Supreme Court collegium. The transfer, which followed the judge’s sharp criticism of the police response to the riots, was alleged to be politically motivated by opposition parties.

Shah’s response came after a day-long debate in which Opposition leaders demanded a judicial probe and blamed the government and police for failing to control the Delhi violence, or arrest the rioters quickly.

“Two kinds of viruses have created havoc. At international level, it is coronavirus, about which research is still going on. The second virus is in Delhi... the communal virus, which too is spreading with high intensity. We all know the source of the virus -- where this virus was spreading and who all were supporting it and who were the collaborators of this communal virus,” Sibal said.

Sibal questioned Shah’s silence during the violence and asked why first information reports (FIRS) were not registered against those who delivered hate speeches that “incited” communal violence. “You can do anything to protect cows, but not human beings? Do we need to bring another article to ensure the protection of human beings?” he asked, referring to provisions of the Constitution on cow protection.

His party colleague, Anand Sharma, demanded a probe into the alleged failure of intelligence agencies in gathering information. “There was mishandling of situation by the administration. It should also be probed. There should be a judicial commission and the probe should be fair,” he said in the Rajya Sabha.

Aam Aadmi Party (AAP) member Sanjay Singh accused the central government of not doing enough to quell the violence and said the riots were “conspired and carried out in a well-planned manner”, linking the violence to the February 8 Delhi assembly polls.

“Humaneness and humanity were killed in riots. It didn’t happen in a day. The fire was planned before the assembly polls, and ignited after that,” he said.

Trinamool Congress leader Derek O’brien asked Shah and Modi to stop following social media handles that “spread bigotry and hate”.

“If Delhi Police had done so well, why was the chain of command superseded and the NSA [National Security Advisor] deployed...or is the new role of NSA to control riots?” he added, referring to NSA Ajit Doval’s visits to the riot-hit areas.

Union minister Ravi Shankar Prasad said Opposition leaders were “unable” to state any clause in the CAA that took away citizenship. He said Shah in his “effective” reply had “cleared all misgivings” about the CAA and NPR. nity level,” said Lav Aggarwal, joint secretary, Union health ministry at a press briefing earlier on Thursday.

Active patients include 16 Italians and one Canadian. The total tally of 74 -- not including the deceased -- includes three from Kerala who were discharged last month after recovery.

The new pathogen, called Sarscov-2, has raced around the world since it began from central China in late December, infecting at least 130,000 people till Thursday and claiming the lives of close 4,700. While most of these numbers are from China, the disease is now spreading at a growing speed in other parts of the world, particularly countries such as Iran, Italy and some other European nations.

All of India’s cases can at present be traced to infections from patients who caught the disease while travelling in these nations – a factor that prompted the Union government on Wednesday to take the drastic step of shutting the country off for foreign tourists for a month.

The government also invoked two laws giving officials at state levels powers to take extraordinary steps to combat the outbreak. “The Delhi government has declared coronavirus an epidemic. We need to exercise abundant caution to contain the disease. All cinema halls, schools, colleges in Delhi will be shut until March 31, but exams will continue as scheduled. People are advised to stay away from public gatherings,” said Delhi chief minister Arvind Kejriwal after a crucial meeting to discuss the issue on Thursday.

Chhattisgarh, Manipur and

Uttarakhand too ordered schools and colleges to be shut for the time being.

Urging people not to panic, the Union health ministry justified the intensifying new curbs.

“Cases doubling in a span of say four weeks (from January 31 to March 3) is not a concern for India as we have a small number of positive cases. However, as a matter of abundant precaution we are pulling all stops to contain the infection so that it doesn’t spiral out of control,” said Dr RR Gangakhedkar, epidemiology head, Indian Council of Medical Research.

The Delhi administration also directed made it mandatory for all offices, shopping malls and other public spaces to be disinfected on a daily basis.

Kejriwal also said the government will open unused flats and rooms in under-construction hospitals if needed.

Cabinet secretary Rajiv Gauba outlined specific tasks to different ministries on Thursday to sharpenthegovernment’sefforts to contain the outbreak. Home ministry has been asked to identify facilities that can be used for isolation wards, quarantine centres or temporary hospitals. It has also been asked to ensure immigration services strictly implement the visa restrictions.

The foreign ministry has been asked to communicate with other countries and provide advisories to Indians abroad and advise the government on impact of trade and travel restrictions in the country.

The defence ministry has been told to extend its medical facilities for civilians and contribute to the pool of public health experts