Reinstating confidence in the reconstructed Yes Bank, Rajnish Kumar, Chairman of India’s largest public sector lender State Bank of India (SBI) said that SBI will not sell even a single share of the 49 per cent stake it has picked up in the troubled lender.
Reinstating confidence in the reconstructed Yes Bank, Rajnish Kumar, Chairman of India’s largest public sector lender State Bank of India (SBI) said that SBI will not sell even a single share of the 49 per cent stake it has picked up in the troubled lender. Kumar was flanked by Yes Bank administrator, Prashant Kumar, who will soon become the Managing Director and CEO of Yes Bank and Ashutosh Khajuria, CFO, Federal Bank in a press conference where the three looked to calm fear among depositors of Yes Bank. The cash-starved lender that was placed under a moratorium by the Reserve Bank of India in the first week of March will resume normal operations at 6 PM tomorrow.
The SBI Chairman said that the capital raising done for Yes Bank might see a second round in the future. SBI received board approval for Rs 7,250 crore but was allotted shares worth Rs 6,050 crore. Kumar added that none of the banks and HDFC are looking to sell their holdings ahead of the three year lock-in period. The trio all of whom have had affiliations to the SBI said that there were sufficient funding lines available for Yes Bank. It was, however, insisted that the moratorium be lifted as soon as possible given the large number of small and medium enterprises that are banking with Yes Bank, the bankers said.
Prashant Kumar, the former CFO of SBI, claimed that only one-third of the total customers of Yes Bank withdrew money to the tune of Rs 50,000 during the moratorium period. “We have done our extensive analytical study of customer behaviour, Only one-third of the customers have withdrawn Rs 50,000 during the period and in the last 4 days we have had more inflows than outflows,” Kumar said while claiming that the Bank has taken every possible step to ensure that customers stay invested in the bank that is trying to find a strong footing.
As the top bankers looked to reaffirm the faith, Prashant Kumar termed the reconstruction of Yes Bank as historic. “Eight banks came together and supported a cause. This is something that has impacted the entire banking industry. If not contained this would have had a bigger impact, said Prashant Kumar who will take over as the MD & CEO of Yes Bank from the end of this week. He added, “This is a Historic incident that not only did we save, we took care of the bank in 13 days.”
Yes Bank share price shot up close to 60 per cent on Tuesday after eight firms namely, ICICI Bank, HDFC, SBI, Kotak Mahindra Bank, Axis Bank, Bandhan Bank and IDFC Bank stepped up to save the struggling lender. According to the Yes Bank Reconstruction Scheme 2020, the moratorium placed on the lender will be lifted tomorrow at 6 PM, resuming normal services.