Restriction on Yes Bank Share Sell: What is it and how to handle the situation

By: |
March 16, 2020 4:32 PM

According to a notification issued by the Ministry of Finance, 75 per cent of all Yes Bank shares that held in the demat accounts of the investors will be locked for 3 years and can't be sold.

Yes Bank Moratorium, Yes Bank Crisis, restriction on Yes Bank share sell, Ministry of Finance, Reserve Bank of India, RBI, Buy Today Sell Tomorrow, BTST trade, demat account, Yes Bank Reconstruction Scheme 2020, SBI, HDFC Bank, ICICI BankThe restriction on share sell will not be applicable on investors holding less than 100 shares of Yes Bank.

According to a notification issued by the Ministry of Finance, 75 per cent of all Yes Bank shares that held in the demat accounts of the investors will be locked for 3 years and can’t be sold. However, the restriction on share sell will not be applicable on investors holding less than 100 shares of the crisis hit Yes Bank.

According to the notification, BTST (Buy Today Sell Tomorrow) trades will not be allowed in Yes Bank, so the traders/investors will not be able to sell shares bought on March 12 and 13 until they get the delivery of the shares in their demat account.

However, the 75 per cent restriction is applicable only on shares held by investors up to Friday, March 13, 2020 and not on new shares that are bought from Monday, March 16, 2020. So, from Monday, March 16, 2020, whatever new shares are bought, will be available to sell freely. Hence, BTST trades will be allowed for shares bought from March 16, 2020.

Importantly, the traders/investors who have already sold Yes Bank shares from their holding before 10 am on Monday, March 16, 2020 will have to square off (buy the shares) on the same day itself to avoid any auction. This is necessary because shares cannot be debited from the demat accounts of the traders/investors due to the restriction imposed by the Finance Ministry.

The restriction on share sell came after the Reserve Bank of India (RBI) first imposed a moratorium, restricting the withdrawal limit at Rs 50,000 from Yes Bank accounts till April 3, 2020.

However, announcing a reduction in moratorium period after getting approval from the Union Cabinet on the Yes Bank Reconstruction Scheme 2020, the crisis-hit bank, in a tweet, said, “We will resume full banking services from Wednesday, March 18, 2020, 18:00 hrs. Visit any of our 1,132 branches from Mar 19, 2020, post commencement of banking hrs to experience our suite of services. You will also be able to access all our digital services and platforms.”

The announcement came after a plan to bail-out Yes Bank was chalked out, under which, State Bank of India (SBI) would invest Rs 6,250 crore picking-up 650 crore shares or 49 per cent stake in the reconstructed bank.

Apart from SBI, the country’s largest PSB, leading private sector lenders HDFC Bank and ICICI Bank would invest Rs 1,000 crore each in the crisis-hit bank, picking up equity in excess of 5 per cent. Some other private lenders like – Axis Bank, Kotak Mahindra Bank, Federal Bank, Bandhan Bank and IDFC Bank – would also invest in Yes Bank.

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