- Madhu Kapoor – one of the key promoters of YES Bank, his stakes are not just 1.67% in the private bank.
- SBI has become the largest shareholder of YES Bank with a 48.21% stake and 605 crores of shares.
After a sudden drop in cash reserves of YES Bank, its 16 years of sustaining and growth is questioned. To revive the falling private bank, SBI and LIC together acquired half of YES Bank’s share at ₹2 per share. SBI is now the largest shareholder of YES Bank.
By limiting cash withdrawals to ₹50,000, customers have all the reasons to question the private bank’s working. PhonePe also decided to shift its servers to ICICI Bank.
Realizing the need of the hour, India’s government bank backs up another private bank (which is not the first time). After SBI becoming the largest shareholder of YES Bank, within days rotated a Yes Bank Ronsctructon Scheme 2020.
What Changes SBI Mandated?
YES Bank’s new board of directors will be headed by Prashant Kumar – ex CEO of SBI Bank. He has been appointed as Chief Executive and Managing Director of the private lender.
Sunil Mehta, Ex non-executive chairman of PNB (Punjab National Bank) has been appointed as non-executive chairman of YES Bank. Mahesh Krishnamurthy will serve as a non-executive director of the bank and Atul Bheda as a non-executive director.
RBI may also appoint one or more persons as additional directors.
“Any investor who is permitted to have the voting right of 15% shall have the right to nominate one director on the board.” – according to the government.
What’s The Good News?
As per the notification, the barrier of ₹50,000 cash withdrawal will be removed in 3 working days from Wednesday next week. Finally, a slight relief for the accountholders!
The real challenge for YES Bank’s largest shareholder will be to retain trust in its customers and give them a reason for not withdrawing all their money and rush towards another bank. Which is going to happen eventually.
SBI will also inject some ₹7,250 crores in the struggling private bank and hope for some revival. The reconstruction scheme also says all YES Bank employees have been guaranteed at a year-long continuation of employment and all its branches will continue to function as usual.
7 investors shake hands with SBI to put over ₹12,000 crores together into YES Bank. ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, Radhakishan Damani, Rakesh Jhunjhunwala and Azim Premji Trust are other potential investors along with SBI being the largest shareholder of YES Bank.
So, 2 silent bankers, Sunil Mehta and Prashant Kumar are back in the action to take care of India’s falling private bank. After a number of helping hands, there will be relaxation for the customers but the real challenge is to rebuild trust in the bank once again.
Almost all the major private banks in India are taking the fall seriously and stood up to help YES Bank. With SBI being the largest shareholder of YES Bank, revival days are said to happen real soon.