Yes Bank board okays Rs 5,000 cr fund raise plan; Prashant Kumar new MD and CEO
Cash starved private sector lender Yes Bank on Thursday approved a proposal to raise Rs 5,000 crore by way of share-sale, including qualified institutions and rights issue. The board meeting held on Thursday cleared this proposal. With this the new board also came to the force with Prashant Kumar formally becoming the MD and CEO of Yes Bank.
This fund raising will be over and above Rs 10,000 crore cleared in February 7, 2020 board meeting.
The board at its meeting has approved subject to receipt of requisite approvals, raising of funds for an additional amount aggregating up to Rs 5,000 crore, Yes Bank said in a regulatory filing.
The fund may be raised in one or more tranches by "way of issuance of securities but not limited to through a qualified institutions placement/ public issue, rights issue, global depository receipts, American depository receipts, foreign currency convertible bonds or any other permissible mode," it said.
So, in aggregate the fund raising cannot exceed Rs 15,000 crore, it added.
Facing the collapse of the fourth largest private lender, the Reserve Bank sacked Yes Bank management and placed it under an administrator in the evening of 5 March with a 30-day moratorium which was later on curtailed to nearly two weeks.
The moratorium on the bank which restricted cash withdrawals limits to only Rs 50,000 was lifted after banking hours on March 18.
On March 14, the government notified the rescue plan drafted by the RBI under which State Bank of India would pick up around 49 percent equity in Yes Bank.
Private lenders joined SBI to shield the banking sector from a widespread crisis by injecting Rs 10,000 crore into the bank with SBI alone infusing Rs 6,050 crore.
The bank also said that pursuant to the Yes Bank Reconstruction Scheme 2020, the office of the administrator of the bank, Prashant Kumar, "stands vacated".
Private lenders ICICI Bank, Axis Bank, Kotak Mahindra Bank, IDFC First Bank, Bandhan Bank, Federal Bank and mortgage lender HDFC Ltd have also infused capital of over Rs 3000 crore in cash-strapped Yes Bank.
Kumar, a veteran ex-SBI official, assumed charge as bank''s RBI appointed administrator on March 5, 2020 as soon as the board was superseded, and was later on designated as the MD and CEO.
With this, Kumar has become the head of the bank for the next three years.
Yes Bank said the board of the bank has been reconstituted with effect from March 26, 2020 with a total of eight members including Kumar.
The other board members include Sunil Mehta as the non- executive chairman, who also held the same position with PNB in the past; Mahesh Krishnamurti and Atul Bheda as non-executive directors; R Gandhi (former RBI deputy governor) as additional director appointed by the banking regulator and Ananth Narayan Gopalakrishnan as additional director appointed by RBI.
Partha Pratim Sengupta and Swaminathan Janakiraman as directors nominated by SBI on the Yes Bank board.
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