By Our Correspondent
MUMBAI/NEW DELHI/BHUBANESWAR: Yes Bank crisis to be solved soon, 3-year lock-in put in place for shareholders, sources said on Saturday. The moratorium on YES BankNSE 2.00 % will be lifted at 6 pm on March 18, the third working day after the YES Bank reconstruction scheme comes into force.
Yes Bank Limited is an Indian public bank headquartered in Mumbai, India and was founded by Rana Kapoor and Ashok Kapur in 2004. It offers wide range of banking and financial products for corporate and retail customers through retail banking and asset management services.
YES Bank was placed under a moratorium earlier this month by the Reserve Bank of India (RBI), who imposed a Rs 50,000-limit on withdrawals from the bank till April 3.
“The order of moratorium on the reconstructed bank issued by the Government of India in the Ministry of Finance, Department of Financial Services vide notification number S.O. 993(E), dated the 5th March, 2020 shall cease to have effect on the third working day at 18:00 hours from the date of commencement of this Scheme,” the government said in a gazette notification.
The government reconstruction scheme notified on Saturday for troubled Yes Bank has prescribed a three-year lock-in for all investors, including retail investors, to the extent of 75 percent of their holdings.
Only retail investors that hold less than 100 Yes Bank shares are exempted. The lock-in is effective as of March 13, meaning retail investors cannot sell their shares when trading opens on Monday.
“This is an odd decision. The intention may be to reduce volatility in the shares. But the government should focus on the recapitalisation of the bank and proper working of the bank rather than the trading of shares,” said Sudip Bandyopadhyay, Director, Intitrade Capital.
State Bank of India (SBI), the lead investor in Yes Bank, has already announced to infuse Rs 7,250 crore in the bank, while other private banks including ICICI Bank, Axis Bank and Kotak Mahindra Bank have also been roped in to revive the lender.
With the scheme coming into effect, the moratorium, or withdrawal limitations imposed on Yes Bank depositors, will be lifted at 6:00 pm on the third working day, as was confirmed by union finance minister Nirmala Sitharaman at a press conference yesterday, about 15 days ahead of schedule.
The scheme also sanctioned the raising of the bank’s authorised capital roughly six times to Rs 6,200 crore to accommodate raising of fresh capital.
A board will be reconstituted comprising of Prashant Kumar, former chief financial officer and deputy managing director of State Bank of India as chief executive officer and managing director, Sunil Mehta, former non-executive chairman of Punjab National BankNSE 10.81 % as non-executive chairman, Mahesh Krishnamurthy as non-executive director and Atul Bheda as non-executive director.
SBI will also nominate two officers as Directors while RBI may appoint one or more persons as additional directors.
Any investor who is permitted to have voting right of fifteen per cent shall have the right to nominate one director on the board.
Meanwhile, in Odisha, the ruling BJD has clarified that funds of Srimandir in Yes Bank are duly protected and urged the opposition not to politicise the matter.
BJD spokesperson Lenin Mohanty said the state assembly was adjourned after taking leader of the opposition, BJP and other parties into confidence. Mohanty appealed to the BJP legislators not to mislead the people on the Srimandir fund issue.
Mohanty urged the members cutting across party lines to remain united to counter the deadly coronavirus which has become pandemic.
The BJD spokesperson, in a press release on Saturday, said, the RBI has given assurance that the Srimandir funds are well protected and added that the issue was discussed in detail during the adjournment motion in the House.
He said a House panel has been formed comprising 12 members under the chairmanship of Speaker to present a memorandum to RBI governor on the issue.
Mohanty said as coronavirus has become pandemic, the state government has taken measures to tackle the disease. He said the government has declared it as a disaster and added that the Chief Minister Naveen Patnaik has sanctioned Rs 200 crore in the first phase to tackle it. Mohanty made it clear that there will be no funds crunch for tackling the menace of the deadly disease.
He urged the BJP legislators to take it seriously as the Centre and the state have declared coronavirus as a disaster. They must take the intention of the state government in the right earnest, Mohanty added.
He further said the state unit of the BJP should observe how the BJP-ruled states like Haryana and Uttar Pradesh are taking measures to tackle the crisis.
