INSUBCONTINENT EXCLUSIVE:
MUMBAI/DELHI: A day after the Reserve Bank of India superseded the Rana Kapoor-promoted Yes Bank board and capped cash withdrawals at Rs
private sector bank.
The scheme proposes full repayment of all deposits, dilution of equity, and write-off of Rs 10,800 crore of additional
tier one (AT-1) bonds.
In a bid to reassure depositors and markets, RBI governor Shaktikanta Das said although a moratorium of 30 days had
been imposed, the resolution would be much quicker
RBI has invited comments and suggestions on the scheme up to March 9, after which it will take a final view.
Sources in the government said
the central bank had decided against merging Yes with SBI because it would have put pressure on the balance sheet of the government -owned
help turn around the bank
The reconstruction scheme envisages increasing the authorised capital of the bank manifold to Rs 5,000 crore from Rs 800 crore.
While the
Government sources expect SBI to get a higher than entry price as and when it sells down some of its stake
with Basel norms and the terms of the bond issue
AT-1 bonds are purchased by institutional investors, mutual funds and insurance companies.
The scheme of reconstruction has been proposed
under Section 45 of the Banking Regulation Act 1949, which gives RBI enormous powers to deal with a bank superseding any norms of the market
which the agency said constitutes an event of default.