The Government of India has reportedly approved the draft reconstruction plan for troubled lender Yes Bank.

The draft scheme was proposed last week by the Reserve Bank of India (RBI) after placing the cash-starved bank under moratorium.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

Yes Bank operates over 1,000 branches across all 29 states in India.

As per the draft plan, the strategic investor in the bank – which happens to be State Bank of India (SBI) – would acquire a 49% stake in Yes Bank.

Yesterday, SBI said it received approval from its Executive Committee of Central Board (ECCB) to buy stake worth INR72.5bn ($974.5m) in Yes Bank.

SBI will purchase 7.25 billion shares in India’s fifth-largest private sector lender at INR10 per share.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

However, as per the draft scheme, SBI will not slash its stake in Yes Bank to less 26% before completing three years from the date of capital infusion.

According to The Times of India, apart from SBI by private sector banks such as ICICI Bank, HDFC Bank, Axis Bank and Kotak Mahindra Bank will also acquire a stake in Yes Bank.

They will also be joined by private investors including Radhakishan Damani, Rakesh Jhunjhunwala, and the Azim Premji Trust.

Together, these investors are expected to invest more than INR120bn ($1.6bn) in Yes Bank, three people familiar with the development told the publication.

The new board of Yes Bank, according to the draft plan, will have at least two members nominated by SBI.

Yes Bank’s administration will be taken over by the new board within seven days of the issuance of notification.

Furthermore, SBI has recommended the name of Yes Bank administrator Prashant Kumar for the role of new CEO of the bank.

Yes Bank is slated to announce its financial results for the third quarter ended 31 December 2019 on March 14. This will give a clear idea about the financial position of Yes Bank.