Cabinet Gives Nod To Reconstruction Scheme For Yes Bank: Finance Minister Nirmala Sitharaman

Finance Minister Nirmala Sitharaman said on Friday that the Union Cabinet had approved the reconstruction scheme for Yes Bank as proposed by Reserve Bank of India. "State Bank of India will invest up to 49 per cent equity in Yes Bank and other investors are also being invited," the Finance Minister said, addressing the media after a meeting of the Union Cabinet. The Finance Minister's comments come at a time the RBI has taken control of Yes Bank and capped withdrawals from its accounts at Rs 50,000 till April 3 in order to protect the depositors. 

"The notification shall come out and the moratorium shall cease on the third working day from the date of the notification, at 1800 hours," the Finance Minister said, while speaking to reporters about the current cap on withdrawals from Yes Bank accounts. 

She also said that the administrator's office will be vacated after seven calendar days following the lifting of moratorium, and a new board will be constituted.

As part of the RBI-backed rescue plan for the troubled private sector lender, State Bank of India (SBI) will acquire up to 49 per cent stake in Yes Bank, and will be required to maintain a minimum holding of 26 per cent in Yes Bank for three years.

All the existing Yes Bank's employees will be retained as part of the deal. 

In a separate development, ICICI Bank's board approved investment of Rs 1,000 crore in Yes Bank through equity. ICICI Bank said it will buy 100 crore equity shares of Yes Bank at Rs 10 per share.

State Bank of India, the country's largest lender by assets, had the previous day approved a plan to purchase 725 crore Yes Bank shares at a price of Rs 10 apiece.

Struggling under a growing pile of bad debt, Yes Bank had been trying to raise the required capital to stay above regulatory requirements.