KEY HIGHLIGHTS
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Watch | Rajnish Kumar On SBI's Role In Yes Bank Rescue
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Key Highlights From The Press Conference
On RBI Action
- Won't comment on writing down of Yes Bank's AT1 bonds
- Prima facie it seems that the value of Yes bank is set at Rs 2,550 crore. Which is why the RBI has chosen to keep the premium at Rs 8
- Will be going to RBI on Monday with our comments
Merger With Yes Bank Ruled Out
- We have been approached by some potential investors
- Will have to see how investors value Yes Bank
- I had said that there is no question of merger of Yes Bank with SBI and I stand by it
- There is no question of any conflict of interest
SBI’s Contribution, And Impact On Finances
- SBI's capital ratios will not be impacted by this investment
- Will not need to raise any further capital from the market. Will not require to raise capital from government either
- Don't believe that our contribution toward Yes Bank will exceed Rs 10,000 crore.
I wish there were not many times where SBI had to step in as a troubleshooter.Rajnish Kumar, Chairman, SBI
Yes Bank's New MD Cannot Be From SBI: Rajnish Kumar
We have the right to appoint two nominee directors and suggest names for Managing Director and Chief Executive Officer’s role. That will be done.Rajnish Kumar, Chairman, SBI
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Fate Of Yes Bank's Employees
- Yes Bank's employees have been given protection under the reconstruction scheme
- It is necessary that their morale is kept high
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Believe SBI's Contribution Won't Exceed Rs 10,000 Crore: Rajnish Kumar
Don’t believe that our contribution toward Yes Bank will exceed Rs 10,000 crore.Rajnish Kumar, Chairman, SBI
Separate Individuals From The Institution, Rajnish Kumar On Rana Kapoor
“Yes Bank is an entity and Rana Kapoor is an individual. If the individual has done something wrong, they will face the consequences. The institution doesn’t have to suffer for that.”
Will Have To See How Investors Value Yes Bank: Rajnish Kumar
- Investment decisions are by choice. No compulsions
- Our board mandate is that we must maintain 0.5 percent above regulatory minimum capital adequacy. We will continue to do that
- Have to give assurance to potential investors and depositors. That's why we are stepping in
- There is a certain process which has to be followed when a bank is being reconstructed. It had to be done
- There were not many options before RBI and government, which is why, they had to go with this proposal.
I wish there were not many times where SBI had to step in as a troubleshooter.Rajnish Kumar, Chairman, SBI
There Is No Question Of Any Conflict Of Interest: SBI Chairman
- SBI's minority shareholders are very important for us. We will be keeping their interests in mind
- SBI's philosophy is not to thrive in the misery of others
- Like all our associates and subsidiaries, we will keep Yes Bank investment at arm's length
Bank Failure Has Huge Effects On Economy And Banking System: SBI Chairman
- A small, medium or big bank's failure has huge effects on the economy and the banking system
- To say that private enterprises should not be saved is wrong. Any enterprise is a national asset and closing it down is a loss for everyone.
- The U.S. and the U.K., considered capitalist role models, have stepping in to save private enterprises
- Wherever help Is required from us as a creditor or lender, we have always extended help.
SBI is a national institute of importance. It has size and credibility. Where we are looking at banking institutions and the question is that of their survival, we have to step in. Allowing it to fail will lead to huge contagion effect.Rajnish Kumar, Chairman, SBI
- We had tried our best to save Jet Airways. But in the circumstances it could not be revived.
Rationale For Rs 8 Premium
- Prima facie, it seems that the value of Yes bank is set at Rs 2,550 crore
- Which is why the RBI has chosen to keep the premium at Rs 8
- Read what the analysts were saying about Yes Bank just a year ago. So you can't take this Re 1 value as the right value
I had said that there is no question of merger of Yes Bank with SBI and I stand by it.Rajnish Kumar, Chairman, SBI
Yes Bank Depositors' Money Not At All At Risk: SBI Chairman
- As far as depositors are concerned, there might be some inconvenience
- But as far as safety of their money is concerned it is fully safe
- I am not Deposit Insurance and Credit Guarantee Corporation to give guarantees for deposits. There is a Rs 5 lakh guarantee available for depositors. But I am just letting everyone know that I agree with RBI and government's assurance to depositors.
My nephew has a Yes Bank account and he was the first person to call me. I told him to not worry at all. His funds are safe. I want to tell this to all Yes bank depositors.Rajnish Kumar, Chairman, SBI
SBI's Capital Ratios Will Not Be Impacted By Yes Bank Investment
- SBI has not lost money in any investment it has made
- We have also ensured that our JV partners are not disappointed
Will not need to raise any further capital from the market. Will not require to raise capital from government either.Rajnish Kumar, Chairman, SBI
Will Make Rs 2,450-Crore Initial Investment: SBI Chairman
- Many investors have already done their due diligence in Yes Bank
- We will work over time 24x7 to complete our due diligence
We may or may not maintain the entire 49% stake in Yes Bank.Rajnish Kumar, Chairman, SBI
We Have Been Approached By Some Potential Investors: SBI Chairman
- Considerable investor interest in India's financial sector
- Will look at investment proposals in consultation with RBI
- Final decision on the path ahead rests with SBI board
- Many investors have already done their due diligence in Yes Bank
- Will try to get resolution plan approved and implemented much before the RBI deadline
- SBI will be taking over 49 percent stake and will maintain a minimum of 26 percent stake for three years
We will work overtime, 24x7, to complete our due diligence.Rajnish Kumar, Chairman, SBI
Won't Comment On Writing Down Of Yes Bank's AT1 Bonds: SBI
- Writing down AT-1 bonds is part of the RBI's scheme
- Will not comment on why the RBI chose to do so
Will Provide Comments To RBI On Monday
- RBI's draft scheme is already in the public domain
- Our investment and legal team is doing due diligence on the draft
- Will be going to RBI on Monday with our comments
SBI To Outline Contours Of Yes Bank Rescue
The State Bank of India will today flesh out details of the draft rescue plan for Yes Bank Ltd. proposed by the Reserve Bank of India.
The reconstruction plan, which RBI put out last evening, proposes that SBI acquire a 49 percent stake in beleaguered Yes Bank at a minimum of Rs 2,450 crore.
The RBI, which advised the government to place Yes Bank under one-month moratorium, has placed the draft restructuring scheme in public domain for comments.
According to the scheme:
- Yes Bank’s authorised capital shall stand altered to Rs 5,000 crore from the current Rs 800 crore.
- The number of equity shares will be increased to 2,400 crore from the current 255 crore (face value Rs 2/- each) aggregating to Rs 4,800 crore.
- SBI shall agree to invest in the equity of the reconstructed bank such that post infusion it holds 49 percent.
- The capital infusion will be at not less than Rs 10 per share (Face value Rs 2, Premium Rs 8)
- SBI shall not reduce its holding below 26 percent for three years from date of capital infusion.
Here’s more on RBI’s proposal.
That came after the government of India put Yes Bank under a one-month moratorium, capped withdrawals while RBI superseded its board as it saw a steady deteriorate in the bank’s financial position.
Here’s more related coverage around the Yes Bank crisis:
- Mutual Funds With Equity Exposure To Yes Bank
- Here’s How Much Mutual Funds Are Exposed To Yes Bank Debt
- Yes Bank Shares Fall 85% Intraday To Lowest On Record
- Max Financial Falls The Most Since July 2016 On Yes Bank Crisis
- Yes Bank’s Bonfire Of Insanity Was Left To Burn
- Indian Rupee Slides, Bonds Rally After RBI Seizes Yes Bank
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