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Last Updated : Mar 05, 2020 07:38 PM IST | Source: Moneycontrol.com

Govt approves SBI's plan to buy stake in Yes Bank: Report

Yes Bank had in September 2019 announced a $2 billion capital raising plan

 
 
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The government has approved the State Bank of India's (SBI) plan to lead a consortium and purchase stake in Yes Bank, Bloomberg reported.

SBI has also been given the green signal to choose members of the consortium, sources told the news agency.

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The announcement is expected soon, the report added.

Moneycontrol could not independently verify the report.

Representatives for Yes Bank and SBI have not yet responded to BloombergQuint's requests for a comment.

Yes Bank had in September 2019 announced a $2 billion capital raising plan.

Shares of Yes Bank jumped 17 percent following the report, while SBI's shares fell 5 percent.

Commenting on the development, former Indian Banks' Association (IBA) chief executive VG Kannan told CNBC-TV18 that the stake purchase by SBI should not be seen as an acquisition but rather an investment. Banking regulators won't allow substantial stake acquisition in another bank, he added.

In January 2020, SBI Chairman Rajnish Kumar had said “I have a feeling that it (Yes Bank) will not be allowed to fail”.

The exchanges had sought a clarification from SBI and Yes Bank in the matter and the following is the response from the banks:

Yes Bank: "In the said matter, we would like to clarify that as on date, the Bank has not received any such communication from RBI or any other the Government or Regulatory authorities or from the SBI and we are unaware of any such decision."

SBI: "We will abide by the timelines under Regulation 30 of SEBI (LODR) Regulations 2015 in disclosing the developments, if any in the matter to Stock Exchanges.

Note: This copy has been updated with the banks' response to the exchange

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First Published on Mar 5, 2020 10:59 am