State Bank of India to buy shares worth Rs 7,250 crore of cash-strapped Yes Bank

The State Bank of India on Thursday said that it will buy shares worth Rs 7,250 crore of the cash-strapped, Yes Bank. The country's largest lender SBI will buy 725 crore shares at Rs 10 per share in accordance with the draft reconstruction scheme envisaged by the Reserve Bank of India.

In a regulatory filing, SBI said, "its Executive Committee of Central Board (ECCB) on Wednesday, March 11, 2020, permitted the purchase 750 shares of the private lender's at Rs 10 per share subject to all regulatory approvals. SBI's shareholding in Yes Bank will remain within 49 per cent of the paid-up capital."

According to RBI's reconstruction scheme, the strategic investor was not only supposed to pick up 49 per cent stake but assure that the holding will not fall below 26 per cent for a minimum period of three years from the date of capital infusion.

The scheme was announced a day after RBI imposed a moratorium on the Yes Bank, restricting withdrawals to Rs 50,000 till April 3, 2020, while also superseding the bank's board.

RBI had invited suggestions and comments from members of the public, including the banks' shareholders, depositors and creditors on the draft scheme.