SBI to invest Rs 7,250 cr for YES Bank rescue plan

The largest lender State Bank of India on Thursday announced a Rs 7,250-crore fund infusion into the crippled Yes Bank under which it will pick up to 49% equity in the fourth largest private sector lender.

The fund infusion is part of the Reserve Bank-mandated rescue plan.

SBI said its shareholding in Yes Bank will remain within 49% of the paid up capital of the private lender and following the fund infusion, it will pick up 725 crore shares. "The executive committee of the central board at its meeting held on March 11 accorded approval for purchase of 725 crore shares of Yes Bank at a price of Rs 10 a share, subject to regulatory approvals," SBI said in an exchange filing.

The bank, however, did not mention the exact quantum of stake it will be buying in Yes Bank.

Under the reconstruction scheme, SBI will have to buy 49% of Yes Bank and cannot reduce its holding below 26% before for the next three years. The SBI investment of Rs 7,250 crore is much higher than Rs 2,450 crore it had planned initially for 49% stake in the private sector lender that began operations in 2004.

Last week, SBI chairman Rajnish Kumar had told reporters that the bank would invest Rs 2,450 crore to buy 245 crore shares of Yes Bank. He had also spoken about roping in other investors and SBI investment would not exceed Rs 10,000 crore.

(For all the latest News, Mumbai, Entertainment, Cricket, Business and Featured News updates, visit Free Press Journal. Also, follow us on Twitter and Instagram and do like our Facebook page for continuous updates on the go)

Free Press Journal

www.freepressjournal.in