Mumbai, March 13 (SocialNews.XYZ) Axis Bank has become the second private lender to confirm investment in the crisis-hit Yes Bank as its board has approved an investment of Rs 600 crore. In a regulatory filing on Friday, Axis Bank said that it will acquire 60 crore shares of Yes Bank for Rs 10 per share.
"The Board of Directors of Axis Bank Ltd at its meeting held today has accorded approval to invest a sum of up to Rs 600 crore for acquiring up to 60 crore equity shares of Rs 2 each of Yes Bank Limited, for cash, at a premium of Rs 8 per equity share, under the proposed Scheme of Reconstruction of Yes Bank Limited under the Banking Regulation Act, 1949," it said.
Earlier, ICICI Bank said that its board has approved a Rs 1,000 crore investment in Yes Bank. State Bank of India's board has already approved 49 per cent stake purchase in Yes Bank, as per the RBI's reconstruction scheme for the bank.
It had said on Thursday that an investment of Rs 7,250 crore would be made in Yes bank to pick up 725 crore equity shares. On Friday, the Union Cabinet approved the Reserve Bank-proposed reconstruction plan for Yes Bank, under which the State Bank along with other private investors would pump in equity. The details of the scheme is expected to come once the government notifies the scheme.
According to Finance Minister Nirmala Sitharaman, the Cabinet decided that the SBI will hold at least 26 per cent stake in the private bank for a minimum period of three years. Similarly, the other investors will also be mandated to have a similar lock-in period for 75 per cent of their investment in the bank. The authorised share capital of the Yes Bank will be revised upwards from Rs 1,100 crore to Rs 6,200 crore.
Besides, Sitharaman indicated that the details of the scheme will be notified soon. She further said that Yes Bank's moratorium will be lifted at 1600 hours, after three working days of the scheme being notified. The office of the administrator shall also stand vacated after seven days from the cessation of moratorium and the new Board will take over the bank.
Last week, the RBI placed Yes Bank under moratorium and capped the withdrawal limit at Rs 50,000 till April 3, due to deteriorating financial health of the bank. The central bank also superseded Yes Bank's board of directors and appointed former SBI CFO Prashant Kumar as its administrator.
Source: IANS
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