RBI announces draft revival plan for Yes Bank, SBI willing to invest

The Reserve Bank of India (RBI) placed in public domain a draft scheme of reconstruction for Yes Bank on Friday, a day after it superseded the board of troubled private sector lender with immediate effect.

Mumbai (Maharashtra) [India], Mar 6 : The Reserve Bank of India (RBI) placed in public domain a draft scheme of reconstruction for Yes Bank on Friday, a day after it superseded the board of troubled private sector lender with immediate effect.

At the same time, the central bank said State Bank of India has expressed its willingness to make investment in Yes Bank and participate in its reconstruction scheme.

The draft plan proposes that the investor bank will invest in the reconstructed bank for up to 49 per cent stake.

The RBI plans to alter the authorised capital for the reconstituted bank to Rs 5,000 crore and number of equity shares will also be altered to 24,000 crore of Rs 2 each aggregating to Rs 48,000 crore.

"It has been proposed that the investor bank will not reduce its holding in the new bank below 26 per cent before completion of three years from the date of infusion of the capital," said the Draft Yes Bank Ltd Reconstruction Scheme 2020.

As per the plan, all employees of the reconstructed Yes Bank will continue with the same pay for at least one year.

The board of directors of the reconstructed bank will have the freedom to discontinue the services of key managerial personnel at any point of time after following the due procedure.

The investor bank will have two nominee directors on the board of the reconstructed bank, according to the plan.

Besides, the RBI may appoint additional directors. It will be open to the board of directors of Yes Bank to co-opt more directors to it.

"It will be open to the reconstructed bank to open new offices and branches or close down existing offices or branches, in accordance with the extant policy of the RBI and complying with the necessary terms and conditions."

The public can submit suggestions and comments on the draft plan till March 9.

( With inputs from ANI )