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SBI Board approved Rs 7,250 cr fund infusion into Yes Bank, Stake remains under 49%

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On March 12, 2020, the executive committee of the central board of State Bank of India (SBI) has approved an investment of Rs 7,250 crore in Yes Bank Ltd. as a part of RBI formulated rescue plan titled “Yes Bank Ltd. Reconstruction Scheme, 2020” for the revival of Yes Bank. The SBI has not specified its shareholding the bank but it will remain under 49% of the paid up capital of the Yes Bank.SBI approves Rs 7,250 cr

  • The investment has been made by purchasing 725 crore equity shares of Yes Bank at a price of Rs 10 per share.
  • As per reconstruction scheme, SBI cannot reduce its holding below 26% before the completion of next three years.

Key Points:

-The investment made by SBI is higher than its original plan of infusing Rs 2,450 crore in the private bank.

-Now SBI seek participation from other investors to bring in equity necessary to recapitalise Yes Bank .

-It should be noted that last week RBI had placed Yes Bank under a moratorium and withdrawals restricted to Rs 50,000 per month till April 3, 2020.  RBI also superseded its board and placed it under an administrator, Prashant Kumar who is a former deputy managing director and CFO of SBI. A day after RBI released draft plan for it’s revival.

About YES Bank:
Establishment– 2004
Headquarter– Mumbai, Maharashtra
Tagline– Experience our Expertise

About SBI:
Formed– July 1955 as SBI
Headquarter– Mumabi, Maharashtra
Chairman– Rajnish Kumar
Digital banking platform– Yono
Tagline– The Banker to Every Indian