NSE restricts Yes Bank shares, announces no Futures & Options contracts from May 29

A day after RBI placed Yes Bank on a moratorium, the National Stock Exchange (NSE) on Friday, has announced that all 'Futures & Options' (F&O) contracts of Yes Bank will expire on May 28, 2020, according to a circular issued. Furthermore, no F&O contracts will be available for Yes Bank from May 29 onwards. RBI which has superseded the commercial bank for a period of 30 days, has assured that a scheme will be put in place prior to the deadline.

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NSE announces expiration of all F&O contracts of Yes Bank

NSE has also announced that no fresh or renewal of Bank guarantees and Fixed deposit receipt issued by Yes Bank will be accepted. Moreover, it has slashed the existing benefit to the members by nullifying 50% of collateral values from March 9 and reducing the remaining 50% of collateral values from March 11. This circular has been put to effect from March 6, 2020.

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RBI takes over Yes Bank for 30 days

On Thursday, RBI  appointed former SBI CFO Prashant Kumar as administrator for Yes Bank and imposed a moratorium on the troubled lender capping its withdrawals at Rs 50,000, for a period of 30 days. The RBI stated that the decision was taken to a serious deterioration in the financial position of the bank and has been done to restore depositors' confidence in the bank. Yes Bank has also cancelled all fund withdrawal requests made by clients to their YES bank accounts and its stocks tumbled by 10%.

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SBI & Yes Bank stake sale

The SBI board has given "in-principle" approval to invest in the Yes Bank after the bank was placed in moratorium. The government has asked SBI and LIC to bail out the private lender which has stressed assets of Rs  45,000-50,000 crore, by forming a consortium of banks and picking up a stake - 24.5 percent stake each. JP Morgan on March 5 slashed the target price on shares of YES Bank to Re 1, in view of the stake sale.

Yes Bank started facing a crisis as it accumulated many bad loans in 2018. Moreover, when RBI refused to extend the term of founder Rana Kapoor as chief executive in 2018, its management was severely hit with his successor Ravneet Gill managing to raise only one round of funds through a share sale to institutional investors. In a bid to revive the bank, Gill has been in talks over the past 18 months with equity investors but could not come up with a concrete investment plan.  

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