BIG: RBI Unveils Draft Reconstruction Scheme Of Yes Bank, Invites Suggestions Till March 9

Economy

A day after imposing a 30-day moratorium on Yes Bank, the RBI on Friday unveiled a draft reconstruction scheme in the public domain and has sought suggestions.

Written By Akhil Oka | Mumbai | Updated On:
RBI

A day after imposing a 30-day moratorium on Yes Bank, the RBI on Friday unveiled a draft reconstruction scheme in the public domain. As per the scheme, State Bank of India has expressed its willingness to invest in Yes Bank and participate in the reconstruction process. Moreover, the RBI has invited suggestions and comments from the members of the public until March 9, 2020. These can be sent to the Chief General Manager, Department of Regulation, Reserve Bank of India, Central office, 13th Floor, Central Office Building, Shahid Bhagat Singh Marg, Fort, Mumbai – 400 001, or via email- cgmicdor@rbi.org.in. Thereafter, it will take a final decision on the way forward.  

Read: 'Scheme To Revive Yes Bank Soon; 30 Days Outer Limit For RBI Moratorium': Shaktikanta Das

Salient features of the draft scheme

Under the ‘Yes Bank Ltd. Reconstruction Scheme, 2020’, the authorised capital of the reconstructed bank shall be altered to Rs.5,000 crore while the number of equity shares will be 2,400 crores. The investor bank shall hold 49% shareholding in the reconstructed bank. Moreover, it cannot reduce its holding below 26% before the completion of three years of infusion of the capital. 

Once the scheme comes into operation, the RBI-appointed administrator will be replaced by a new Board on which the investor bank will have two nominee directors. Importantly, the draft states that no customer will be entitled to get any compensation from the reconstructed bank on account of the changes occurred by virtue of the scheme. On the other hand, all employees will continue in service with the same terms and services at least for a period of one year.  

Read: BIG: SBI Boss Rajnish Kumar Confirms In-principle Approval For Yes Bank Bailout Investment

'RBI will put a scheme in place to revive Yes Bank'

Speaking at an event in Mumbai earlier in the day, RBI Governor Shaktikanta Das spoke about the Yes Bank crisis. He gave an assurance that the draft scheme would be put in place well before the 30-day moratorium period. Das stressed that the RBI intervened only when the bank's efforts did not bear fruit. 

Shaktikanta Das remarked, "30 days is the outer limit of our process, but it will be done sooner than that. You will see that the RBI will put a scheme in place to revive Yes Bank." He added, "Our decision is an investor-based one and one must give us enough time to the bank management and they did try over several months. But when we found that it was not working out, RBI decided to intervene."

Read: Finance Ministry Circular Notifying Moratorium On Yes Bank Pasted Across Branches And ATMs

Read: "Don't Panic": Yes Bank's Former Independent Director Uttam Agarwal Applauds RBI's Step

First Published:
By 2030, 40% Indians will not have access to drinking water
SAVE WATER NOW
PEOPLE HAVE PLEDGED SO FAR
DO NOT MISS