1 min read.Updated: 14 Mar 2020, 01:00 PM IST Written By Anulekha Ray
The government has notified the reconstruction scheme for capital-starved Yes Bank
It has appointed Prashant Kumar as CEO & MD of Yes Bank
The government has notified the reconstruction scheme for capital-starved Yes Bank. The restrictions on withdrawals from its accounts up to ₹50,000 will be lifted in "three working days," the Finance Ministry said in a notification.
"The order of moratorium on the reconstructed bank... shall cease to have effect on the third working day at 18:00 hours from the date of commencement of this Scheme," the government said in a notification on Friday.
On March 5, the Reserve Bank of India placed the crisis-hit Yes Bank under a moratorium. The banking regulator took control of the Yes Bank board and imposed a withdrawal limit from the bank accounts till April 3.
According to RBI-backed rescue for the troubled lender, State Bank of India will acquire up to 49% stake in Yes Bank. On Thursday, SBI board approved a proposal to invest ₹7,250 crore in Yes Bank by purchasing 7,250 million shares at ₹10 apiece.
According to the proposal, HDFC and ICICI Bank will infuse ₹1,000 crore each, Axis Bank ₹600 crore and Kotak Mahindra Bank (KMB) Ltd ₹500 crore into Yes Bank.
The state-run lender cannot reduce its holding below 26% before for the next three years while other investors will be subject to a three-year lock in period for 75% of their investment, the notification mentioned.
According to the government notification, Yes Bank's authorised share capital will be revised upwards from ₹1,100 crore to ₹6,200 crore. The number of total equity shares will stand altered to 3,000 crore of ₹2 each.
It has appointed Prashant Kumar as CEO & MD of Yes Bank. Former non-executive chairman of Punjab National Bank Sunil Mehta is appointed as non- executive chairman. Mahesh Krishnamurthy and Atul Bheda are non-executive directors. The investor bank shall nominate two officers as directors in addition new board, the notification said.