The moratorium on Yes Bank will be lifted by March 18 and the new board led by CEO and MD Prashant Kumar will be put in place by the end of this month, the government said.
The government notified the Yes Bank Reconstruction Scheme 2020 late on Friday. Under the plan, SBI cannot reduce its stake in the bank to below 26 per cent for a period of three years, while other investors and existing shareholders will have a lock-in period of three years for 75 per cent of their investment in Yes Bank. However, the lock-in period will not apply to shareholders with less than 100 shares.
Apart from Kumar, the reconstructed board of Yes Bank will have Sunil Mehta (former PNB non-executive chairman) as non-executive chairman, and Mahesh Krishnamurthy and Atul Bheda as non-executive directors.
The Yes Bank Reconstruction Scheme 2020 shall come into force on March 13, 2020, the gazette notification said.
The RBI had on March 5 put a moratorium on Yes Bank, restricting withdrawals to Rs 50,000 per depositor till April 3. It superseded the board of the troubled private sector lender and appointed Prashant Kumar as administrator.
“The order of moratorium on the reconstructed bank issued by the government… shall cease to have an effect on the third working day at 18:00 hours from the date of commencement of this scheme,” the notification said.
“The office of the administrator of the reconstructed bank shall stand vacated immediately after 7 calendar days from the date of cessation of moratorium … and a new board of directors shall be reconstituted…,” the notification said.
State Bank of India (SBI), which will hold up to 49 per cent stake in Yes Bank, will nominate two directors on the newly-constituted board and RBI can appoint one or more additional directors.
Any investor, other than SBI, with voting right of 15 per cent in the private lender can nominate one director on Yes Bank’s board.
ICICI Bank,”Housing Development Finance Corp Ltd, Axis Bank, Kotak Mahindra Bank and Bandhan Bank will also join the SBI-led consortium and invest in Yes Bank.
HDFC will invest Rs 1,000 crore in Yes Bank through the purchase of 100 crore shares, Axis Bank will invest Rs 600 crore by buying 60 crore shares, Kotak Mahindra Bank Rs 500 crore through 50 crore shares and Bandhan Bank another Rs 300 crore through the purchase of 30 crore shares.
The authorised capital of the reconstructed lender has been fixed at Rs 6,200 crore. All employees of the bank will continue with the same remuneration and service conditions. However, services of ‘key managerial personnel’ may be discontinued at any time by the new board, the notification said.