The Reserve Bank of India (RBI) on 5 March 2020 superseded the board of directors of Yes Bank and appointed Prashant Kumar as the administrator of the bank. The administrator is vested with powers, functions and duties of the board of directors of the bank.
The administrator will consider and take on record the unaudited financial results of the bank, for the quarter and nine months ended on 31 December 2019 along with limited review report thereon by the statutory auditors of the bank on Saturday, 14 March 2020.
Yes Bank was placed under moratorium by an order notified by the Central Government on 5 March 2020. RBI released the draft of Scheme of Reconstruction of Yes Bank and has invited suggestions and comments up to Monday, 9 March 2020.
The scheme called ‘Yes bank Reconstruction Scheme, 2020’ shall come into force on such date (appointed date) as the Central Government may, by notification in the Official Gazette, specify.
As per the draft scheme, Yes Bank has 255 crore shares of Rs 2 per share. State Bank of India (SBI) will be issued 245 crore shares at a price of Rs 10 per share for Rs 2450 crore. This will be 49% of the share capital of the reconstructed bank.
SBI shall not reduce its holding below 26% before completion of three years from the date of infusion of the capital. The new board shall stand constituted from the appointed date. lt will consist of CEO and MD, non executive chairman, non executive directors.
SBI shall have nominee directors appointed on the board of the reconstructed bank. RBI may appoint additional directors to the board. The members of the board so appointed shall continue in office for a period of one year, or until an alternate board is constituted by Yes Bank.
All the deposits with and liabilities of the reconstructed bank will continue in the same manner. The instruments qualifying as Additional Tier 1 capital shall stand written down permanently, in full.
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), 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 offices and branches of the reconstructed bank shall continue to function in the same manner. Reconstructed bank can open new offices and branches or close down existing offices or branches.
The S&P BSE Sensex was down 1,483 points or 3.95% to 36093.85.
Shares of Yes Bank surged 16.67% to 18.90. The stock hit a high of Rs 21.20 and a low of Rs 16.20 so far during the day.
On the BSE, 2.98 crore shares were traded in the counter so far compared with average daily volumes of 2.16 crore shares in the past two weeks.
The stock hit a 52-week high of Rs 285.90 on 3 April 2019. The stock hit a record low of Rs 5.55 on 6 March 2020.
The large cap company has equity capital of Rs 510.09 crore. Face value per share is Rs 2.
