The moratorium on withdrawals from crisis-laden Yes Bank will be lifted on Wednesday evening after the government notified the restructuring scheme proposed by Reserve Bank of India (RBI).
“The order of moratorium on the reconstructed bank… 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 late-night notification on Friday.
The government also appointed Prashant Kumar, former Chief Financial Officer and Deputy Managing Director of State Bank of India, as Chief Executive Officer and Managing Director and Sunil Mehta, former Non-Executive Chairman of Punjab National Bank, as Non-Executive Chairman.
“The notification shall come out and the moratorium shall cease on the third working day from the date of the notification, at 18:00 hours,” Finance Minister Nirmala Sitharaman had said, earlier, on Friday.
The Reserve Bank of India (RBI) had placed Yes Bank under a moratorium earlier this month, took control of its board and imposed Rs 50,000-limit on withdrawals till April 3 following deterioration in the bank’s financial position.
Finance Minister Nirmala Sitharaman had also announced on Friday that the Union Cabinet had approved Yes Bank’s reconstruction scheme as proposed by Reserve Bank of India (RBI). “State Bank of India (SBI) will invest up to 49 per cent equity in Yes Bank and other investors are also being invited,” the Finance Minister had said, addressing the media after a meeting of the Union Cabinet.
As part of the RBI-backed rescue plan for the troubled private sector lender, SBI will acquire up to 49 per cent stake in Yes Bank and maintain a minimum holding of 26 per cent in the beleaguered bank for three years. All existing employees of Yes Bank will be retained as part of the deal.
The SBI board has approved a proposal to invest Rs 7,250 crore in Yes Bank by purchasing 7,250 million shares at Rs 10 apiece. Other banks have also lined up to buy stake in Yes Bank. HDFC and ICICI Bank will infuse Rs 1,000 crore each, Axis Bank Rs 600 crore and Kotak Mahindra Bank, Rs 500 crore, into Yes Bank.
The restructuring scheme also prescribed a lock-in period of three years for investors who hold more than 100 shares in the trouble bank.
Meanwhile, Yes Bank’s founder and former managing director, Rana Kapoor, is in police custody after being arrested on money-laundering charges.