Cabinet approves reconstruction scheme for Yes Bank: FM Sitharaman

Cabinet approves reconstruction scheme for Yes Bank: FM Sitharaman

Union Finance Minister Nirmala Sitharaman on March 13 said that the Cabinet has approved the Reserve Bank of India's (RBI) reconstruction scheme for Yes Bank.

The decision keeps at its core depositors' interest, providing stability to Yes Bank and keeping a stable financial banking system, she said.

FM Sitharaman said that the State Bank of India (SBI) will invest 49 percent of equity in Yes Bank, adding that other investors are also being invited.

The State Bank of India (SBI)will have a lock-in period of three years for up to only 26 percent of the 49 percent of its stake in Yes Bank. For the rest of the investors, the three-year lock-in will be applicable for 75 percent of their investment in the private lender.

The authorised capital itself of Yes Bank is being raised from Rs 1,100 crore to Rs 6,200 crore in order to accommodate immediate and subsequent capital raising requirement, the FM noted.

Within three days of the notification of the scheme the moratorium placed on Yes Bank will be lifted, the finance minister said. Further, a new board will be constituted within seven days and at least two directors from SBI will also be a part of it.