New Delhi: The Union Cabinet on Friday approved the restructuring plan of Yes Bank. State Bank of India (SBI) will buy 49 percent stake of Yes Bank under the scheme proposed by the Reserve Bank. Finance Minister Nirmala Sitharaman said that the cabinet has approved the restructuring plan of Yes Bank as suggested by the Reserve Bank.
The Reserve Bank had banned Yes Bank on March 5. Also, withdrawal limit was set for customers up to Rs 50,000. The moratorium has been extended till April 3, besides the central bank appointed Prashant Kumar, the former chief financial officer of SBI, as the administrator of YES Bank.
Other investors will also be invited. He said that every investor will be prohibited from buying and selling shares for three years. In the case of SBI, it will not be able to reduce its stake to less than 26 percent for three years. The Finance Minister said that the authorized capital of Yes Bank will increase from Rs 1,100 crore to Rs 6,200 crore.
This restructuring plan has been approved keeping in mind the interests of the account holders. This will provide stability to Yes Bank as well as the entire financial system. The ban on Yes Bank will be lifted within three days of notification of the reorganization plan. Also, a board of directors will be set up within seven days of this notification. On Thursday, SBI had approved to invest Rs 7,250 crore in Yes Bank. This is much higher than his initial Rs 2,450 crore investment plan.
