Share Market News Today | Sensex, Nifty, Share Prices LIVE: The Reserve Bank of India has announced a reconstruction plan for the cash-strapped private sector lender Yes Bank. The RBI announced that the State Bank of India will invest in the reconstructed bank for up to 49% stake. India’s largest public sector bank, SBI will buy new equity in the bank at a minimum of Rs 10 per share, including Rs 8 per share premium. Calculations show that the new investment by SBI may work out to be about Rs 2,450 crore. According to the proposed resolution plan, Yes Bank’s Authorised Capital will be altered to Rs 5,000 crore. As per the draft plan of RBI, SBI cannot reduce its holding below 26% before the completion of 3 years from the date of capital infusion. The central bank has sought comments on the draft plan latest by 9 March 2020. The announcement comes a day after India’s largest public-sector bank said that its board has given in-principle approval to the Bank to explore investment opportunity in Yes Bank.
Domestic markets ended the day deep in the red on Friday. S&P BSE Sensex ended the day, after shrugging off some losses, at 37,577 down by 894 points or 2.32 per cent; NSE Nifty was just below the 11,000 mark at the end of Friday’s trading session. Yes Bank share price tanked 55 per cent, while State Bank of India slipped 619 per cent. All eyes are on the troubled private lender, Yes Bank as investors react to the Reserve Bank’s decision limiting withdrawal for Yes Bank customers to Rs 50,000 for the next 30 days. Finance Minister Nirmala Sitharaman and RBI Governor Shaktikanta Das, during the day, assured Yes Bank customers that their interests are of the utmost importance. Sitharaman, talking to reporters said that RBI and Government are working hand in hand to address the issue.
Highlights
Moody's downgrades Yes Bank's ratings; ratings remain under review.
The news Yes Bank board wil have six members, including one non-executive chairman and two non-executive directors.
According to RBI's draft plan for Yes Bank, the new Board will have the power to ask Key Managerial Staff to leave.
In its proposed resolution plan, the RBI has altered Yes Bank’s Authorised Capital to Rs 5,000 crore; and the number of equity shares to 2,400 crore of Rs 2 each. Further, it has proposed SBI cannot reduce its holding below 26% before the completion of 3 years from the date of capital infusion. However, the reconstruction plan is a draft and RBI has sought comments on the same latest by 9 March 2020.
The Reserve Bank of India on Friday announced a reconstruction plan for troubled private lender Yes Bank, just a day after a moratorium and curb on withdrawals created widespread panic among depositors and investors. The RBI announced that the State Bank of India will invest in the reconstructed bank for up to 49% stake. SBI will buy new equity in the bank at a minimum of Rs 10 per share, including Rs 8 per share premium. According to back of envelope calculations, SBI will invest about Rs 2,450 crore of equity capital into Yes Bank. Yes Bank has a paid up share capital of over 255 crore shares of Rs 2 face value each. 49% of post-issue share base would be at about 245 crore shares of face value Rs 2, plus a premium of Rs 8 each.
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The current moratorium has been brought in keeping in mind the interest of depositors, says Prashant Kumar
The newly appointed Yes Bank administrator, Prashant Kumar has said that depositors need not worry.
All the employees of the Reconstructed bank shall continue in its service with the same remuneration and on the same terms and conditions of service (T&C), including terms of determination of service and retirement, as were applicable to such employees immediately before the Appointed date, at least for a period of one year. Board of Directors of the Reconstructed Bank will however, have the freedom to discontinue the services of the Key Managerial Personnel (KMPs) at any point of time after following the due procedure.
"The Investor bank shall agree to invest in the equity of the Reconstructed bank to the extent that post infusion it holds 49% shareholding in the Reconstructed bank at a price not less than Rs.10/- (Rupees ten only) [Face value of Rs.2/- (Rupees two only) and premium of Rs.8/-(Rupees eight only)]. The Investor bank shall not reduce its holding below 26% before completion of three years from the date of infusion of the capital."
From the Appointed date, in ‘clause V’ of the Memorandum of Association of the Reconstructed bank, the Authorised Capital shall stand altered to Rs.5,000 crore and number of equity shares will stand altered to 2, 400 crore of Rs.2/- each aggregating to Rs.4,800 crore.
The new Yes Bank board will have six members.
Finance Minister said that the RBI has been monitoring Yes Bank since 2016. FM added, culture at Yes bank was found to be of a weak compliance.
RBi has announced a draft scheme for Yes Bank. RBI says SBI has shown willingness to invest in Yes Bank.
The central bank has announced a reconstruction plan for troubled private sector lender Yes Bank.
Yes Bank resolution efforts are aimed at maintaining “stability and resilience” in the Indian financial sector and the difficulties will be overcome “very swiftly”, RBI Governor Shaktikanta Das said on Friday. The 30-day moratorium deadline is an “outer limit”, he said, reiterating that the interests of depositors will be “fully protected”.
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With the RBI taking charge of Rana Kapoor co-founded Yes Bank, Finance Minister Nirmala Sitharaman has put the blame squarely on the Congress-led UPA government for the bank’s current crisis.
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The Indian markets witnessed huge sell-off in today’s session led by weak global cues and Yes Bank debacle which spooked investor sentiments. The Nifty index ended lower by 2.5% to close at 10,989 levels. The broader markets too were not spared as both BSE Midcap and Smallcap ended lower by 2.4% and 1.9%. Amongst the sectors, all the indices ended with losses wherein Metals, Banking and Realty were the top losers.
We continue to maintain our cautious view on Indian markets and expect volatility to remain high in the near term. The updates on spread of Coronavirus cases would be the single biggest factor dictating global markets going forward. On the domestic front, updates on resolution plan for Yes Bank along with spread of Coronavirus cases would be actively tracked by traders and investors.
Finance Minister Nirmala Sitharaman will address a press conference at 4:30 PM today.
Auto giants Maruti Suzuki and Bajaj India shed losses made earlier in the day to trade in the green. They were accompanied by Asian paints. Maruti Suzuki was up 1.3%; Bajaj Auto gained 0.89% and Asian Paints moved slightly up by 0.23 per cent.
India’s biggest bankers Deepak Parekh, Aditya Puri, and Uday Kotak stepped in to assure the customers of troubled private sector Yes Bank, saying that they believe that depositors’ money is in safe hands.
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One of India’s largest private banks, Yes Bank got a new administrator in Prashant Kumar on Friday after the Reserve Bank of India imposed a moratorium on the private lender due to mounting bad loans. Prashant Kumar has taken charge with immediate effect, Yes Bank said in a BSE filing on Friday.
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PhonePe, which depends on the cash-starved lender for its transactions, witnessed a service outage after the Reserve Bank of India limited Yes Bank customer withdrawal to just Rs 50,000 for the next 30 days.
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Finance Minister, talking to reporters outside her office at the North Block said that she will talk to the RBI Governor and ask him to put in place measures that will make sure that there is no shortage of funds for customers who wish to withdraw money from Yes Bank as per the guidelines.
Reserve Bank is behind the issue with full force and we have taken the necessary steps to get the bank back in action as soon as possible: Nirmala Sitharaman
I'm in contact with RBI Governor, he has assured that there will not be any harm to the depositors. The situation has been monitored for a long time: Finance Minister Nirmala Sitharaman.
The lending that happened pre 2014 is the reason that we are still trying to bring our banks out of the trouble, said Finance Minister, Nirmala Sitharaman in an interview with CNBC TV18.
SBI Chairman, Rajnish Kumar after his meeting with Finance Minister Nirmala SItharaman said that the issue of Yes Bank is a bank-specific one and not a sector-specific issue. Kumar went on to say that RBI has been taking steps to save financial institutions and will continue to do so.
Our financial system is strong, one company going under does not shake up the Indian financial system. The way the public is reacting is as if it is the end of the world. It is a temporary overreaction: Deepak Parekh on CNBC TV18
Uday Kotak and Deepak Parekh during an interview with CNBC TV18 said that they do not see the moratorium, put in place by the Reserve Bank of India on Yes bank, last till April 3. Both Kotak and Parekh said that the RBI might come in with a plan in a matter of days which would lick start the revival of Yes Bank.
The bank needs capital and it will get the capital. I'm sure the system will facilitate the revival, Deepak Parekh said in an interview to CNBC TV18
The panic that we have seen is unnecessary and is an overreaction. The moratorium won't last that long but solution will come sooner: Deepak Parekh, chairman, HDFC, said during an interview to CNBC TV18
I expect action in the next few days. Pretty confident this action under section 45 of the Banking Regulation Act, will protect the customers of the bank. I genuinely believe that RBI and government are full capable of bringing stability in the market, said Uday Kotak in an interview to CNBC TV18
There is no need to panic, the interest f the depositors protected, said SBI Chairman, Rajnish Kumar.
Yes Bank was placed under a moratorium on Thursday by the RBI and the fall-out of that has been felt by PhonePe. One of India's largest digital payment service providers is seeing its servers crash as its payment gate-way provider Yes Bank was placed under moratorium by the RBI.
Restructuring being worked out for Yes bank for a long time now, this is the right plan going forward, said CEA Krishnamurthy Subramanian while talking to ET Now. Customers should not be worried, in India we have been very good at solving such issues. We must recognise there was a build-up in bad assets, he added.
Markets were not ready for Yes Bank moratorium; Moratorium will help iron out liquidity issues with yes bank, says Nilesh Shah.
You will see a swift action from the Reserve Bank. 30 days is the outer limit and you will see swift action from RBI being put in place to revive Yes Bank. We have given bank the time but now we feel the time is right to step in: Shaktikanyta Das
Share price of Yes Bank fell 50% on BSE on Friday to trade at Rs 18.45 apiece.
Artemis Electricals Limited share price has gained 19.5 per cent on Friday morning only to fall more than 17% in a matter of a few minutes as investors booked profits. The scrip has been moved to mainboard at BSE limited from BSE SME platform.
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The market capitalisation of BSE-listed firm at the end of trading stood at Rs Rs 147 lakh crore, however, when the markets opened on Friday morning the market capitalisation tanked in a matter of seconds to Rs 143 lakh crore
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