New Delhi: The Union Cabinet on Friday approved a draft resolution scheme for cash-starved Yes Bank. The scheme was announced a day after the RBI imposed a month-long moratorium on the bank, restricting withdrawals to Rs 50,000 per depositor till April 3.
State Bank of India (SBI) on Thursday said it would infuse Rs 7,250 crore into ailing Yes Bank and pick 7,250 million shares at Rs 10 each, and its shareholding would remain within 49 percent of the paid-up capital of the private sector lender.
The draft noted that all the employees of reconstructed Yes Bank shall continue in its service with the same remuneration and on the same terms and conditions of service, including terms of determination of service and retirement, as were applicable to such employees immediately before the appointed date, at least for a period of one year.
The board of directors of reconstructed Yes Bank will, however, have the freedom to discontinue the services of the key managerial personnel (KMPs) at any point in time after following due procedure.
The offices and branches of reconstructed Yes Bank shall continue to function in the same manner and at the same places they were functioning prior to the effective date, without in any way being affected by this scheme.
RBI said it will be open to the reconstructed Yes Bank to open new offices and branches or close down existing offices or branches, in accordance with the extant policy of the central bank.
RBI’s 'Yes Bank Ltd. Reconstruction Scheme, 2020', the Central bank said the strategic investor bank will have to pick up 49 percent stake and it cannot reduce holding to below 26 percent before three years from the date of capital infusion.
The draft also said that authorised capital shall stand altered to Rs 5,000 crore and number of equity shares will stand altered to Rs 2,400 crore of Rs 2 each.
The Cabinet also provided for some relief measures for the telecom sector.