Many private lenders have come to the rescue of YES Bank Ltd., which was placed under moratorium last week. Axis Bank Ltd., ICICI Bank Ltd. and Kotak Mahindra Bank as well as housing finance company Housing Development Finance Corporation Ltd. have approved investments in YES Bank Ltd., joining State Bank of India.
The board of ICICI Bank Ltd. approved an investment of Rs 1,000 crore in Yes Bank Ltd. ICICI Bank informed on Friday that it will purchase 100 crore equity shares of Yes Bank at Rs 10 apiece. “This investment is likely to result in ICICI Bank Limited holding in excess of 5 percent shareholding in YES Bank Limited, with the final shareholding to be determined based on the final Scheme of Reconstruction and share issuance thereunder,” ICICI Bank said.
Similarly, HDFC will also buy 100 crore equity shares of YES Bank at a price of Rs 10 per share, investing Rs 1,000 crore in the private bank.
Axis Bank, in its exchange notification, said that it will invest Rs 600 crore. Axis Bank said that its promoter Life Insurance Corporation of India already holds 8.06 percent stake in YES Bank but the bank does not directly hold any interest. Kotak Mahindra Bank will be investing Rs 500 crore.
SBI has already informed exchanges that its board had approved the purchase of 725 crore equity shares of YES Bank at Rs 10 each, adding up to an investment of Rs 7,250 crore.
The government placed YES Bank under a moratorium last week on the advice of the Reserve Bank of India as the bank’s financial position had weakened considerably. Under the moratorium, the bank’s depositors aren’t allowed to withdraw more than Rs 50,000. The RBI also superseded YES Bank’s board and appointed former SBI Chief Financial Officer Prashant Kumar as administrator.
The RBI on March 6 had released a draft reconstruction scheme, which involved SBI holding up to 49 percent stake in YES Bank.
Addressing mediapersons on Friday, Finance Minister Nirmala Sitharaman said that SBI will be required to maintain a minimum shareholding of 26 per cent in YES Bank for three years. Others investing in the bank will be required to maintain 75 per cent of their shareholding for three years.