A couple of days after the Reserve Bank of India (RBI) placed the Yes Bank under a one-month moratorium, the State Bank of India (SBI) on Saturday asserted of picking up stake up to 49 per cent in the crisis-ridden bank.
SBI Chairman Rajnish Kumar said that their plan would be ready by Monday and submitted to the apex bank.
The public sector banking behemoth is looking at a minimum initial investment of around Rs 2,450 crore. "We may come with initially Rs 2,500 crore and our investment could go up to Rs 10,000 crore in the next three-year period, which is the minimum lock-in period," he said.
Kumar said SBI's stake in Yes Bank can go up to 49 percent but it has to maintain a 26 percent stake in the bank for at least the next three years. "We have received a draft scheme of reconstruction for Yes Bank. On Monday, we would be submitting our plan (to the RBI)," he said.
"Our investment and legal teams are working overtime, 24x7....rest assured that the interests of the depositors would be protected, they should not worry," Kumar told a news conference at the SBI headquarters at Nariman Point here.
“We had informed through the stock exchange that SBI board has given in-principle approval of exploring the possibility of picking up a stake of up to 49 per cent in Yes Bank,” he said.
He, however, ruled out the merger of the SBI with the Yes Bank. "I had said that there is no question of merger of Yes Bank with SBI and I stand by it," he added and denied any conflict of interest.
A day after superseding the Rana Kapoor-promoted Yes Bank board and capped cash withdrawals at Rs 50,000 (Rs 5 lakh in exceptional situations), RBI on Friday came out with the “draft reconstruction scheme” under which SBI will bring in Rs 2,500 crore for a 49% stake in the crisis-ridden private sector bank.
On Thursday, Yes Bank board was superseded by the Reserve Bank of India - with a cap on cash withdrawals and came out with 'Yes Bank Ltd. Reconstruction Scheme, 2020'.
On Friday, Union Finance Minister Nirmala Sitharaman and RBI Governor Shaktikanta Das had assured of revival plans of the ill-fated Mumbai-headquatered bank that has over 1,000 branches and over 1,800 ATM kiosks.
Yes Bank, once a popular and big private sector that was floated by maverick banker Rana Kapoor - he made an exit in September 2018 - has landed in a big mess because of risky loans given to stress corporates like Anil Ambani Group, Essel Group, DHFL, IL&FS.
He also said many potential investors have approached SBI after seeing the draft scheme. "These include some of repute, some overseas and some domestic," he said, adding that the SBI may also go along with some other or group of investors.
According to the draft scheme proposed by the apex bank, the strategic investor bank will have to pick up 49 per cent stake and it cannot reduce holding to below 26 per cent before three years from the date of capital infusion. The RBI has invited comments on the draft scheme from members, depositors, or creditors of YES Bank Ltd and will accept them till March 9.
On the new nominees in the Yes Bank, he said: "We have the right to appoint two nominee directors and suggest names for Managing Director and Chief Executive Officer’s role. That will be done....we have some names in mind."
Asked on the SBI being roped in as a troubleshooter, he said: "I wish there were not many times where SBI had to step in as a troubleshooter." When asked about a possible scenario of SBI poaching on customers of Yes Bank, he said: "We don't thrive on the misery of others."
On why SBI stepped in, Kumar said: "We have to keep in mind that any bank failure has huge consequences. So the SBI is standing behind it makes a difference. Any enterprise, irrespective of ownership, is a national asset. As the largest bank in this country, we have a role to play. For an individual's mistake, why should the institute suffer... we as the biggest bank has a role to play."
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