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Yes Bank Reconstruction Scheme, 2020: Key takeaways

Here are the key contours of the scheme

March 06, 2020 / 07:30 PM IST

After 24 hours of placing Yes Bank under moratorium and superseding its board, the Reserve Bank of India has announced a reconstruction scheme. Here are the key contours of the scheme.

- Yes Bank’s authorised capital to be altered to Rs 5,000 crore

- Number of equity shares reduced to 2,400 crore of face value Rs 2

-Investor bank to hold 49 percent stake in the reconstructed bank. It will acquire this stake for not less than Rs 10

- There is a three-year lock-in period for such investors. They also cannot reduce their holding below 26 percent

- The investor bank (State Bank of India) can appoint two nominee directors

- RBI may appoint additional directors to the reconstructed bank’s board

- No change has been made in the rights and liabilities of the reconstructed bank

- Bank’s Additional Tier 1 capital written down completely and permanently

- Account holder won’t be entitled to receive any compensation from the reconstructed bank

- The terms of service and remuneration of all employees of Yes Bank will continue to remain the same

- The board, however, can discontinue the services of key managerial personnel

- There will be no change in the offices or branch network of the reconstructed bank

- However, the reconstructed bank can open new offices and branches or close down existing offices or branches

To catch all live updates on this developing story, click here....
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