Three banks reduce shareholdings in Yes Bank within 15 days of reconstitution by RBI

In a major development, with release of shareholdings of reconstituted Yes Bank on Wednesday evening, reports stated that three banks - namely Kotak Mahindra Bank, Federal Bank, and IDFC First Bank have reduced ir stake in Yes Bank between March 17 and March 31. As per Bombay Stock Exchange (BSE) website Kotak-Mahindra w holds 3.61% (45.27 crore shares), Federal bank holds 1.92% (24.13 crore shares) and IDFC bank holds 1.67% (20.92 crore shares). Currently, biggest stakeholder - State Bank of India (SBI), has kept its stake undiluted at 48.21%, while or banks HDFC, ICICI Bank, Bandhan Bank, and Axis Bank have maintained ir shares.

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3 banks sell off shares in Yes Bank

Reports state that Federal Bank Ltd and IDFC First Bank Ltd have sold off almost 78% and 64% of ir shares which y have been allowed to sell as per RBI guidelines. Meanwhile, Kotak-Mahindra bank sold off almost 37.8% of ir allowed sellable shares. Experts state that sale of se shares has allowed se three lenders to reportedly recover most of ir investment into stressed lender -Yes Bank. This stake has mainly been picked up by individual shareholders, state reports. As per RBI guidelines, lenders have a lock-in period of three years where y are t permitted to sell over 75% of ir holdings in Yes Bank.

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What is Yes Bank crisis?

Yes Bank started facing a crisis as it accumulated many bad loans in 2018 by lending to corporate defaulters such as DHFL, Jet Airways, and Cafe Coffee day, among ors. Moreover, when RBI refused to extend term of founder Rana Kapoor as chief executive in 2018, its manment 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 bank, Gill has been in talks over past 18 months with equity investors but could t come up with a concrete investment plan.  

Yes Bank Board of Directors reconstituted; administrator Prashant Kumar named as MD & CEO

RBI appointed former SBI CFO Prashant Kumar as administrator for commercial bank - Yes Bank and imposed a moratorium on troubled lender capping its withdrawals at Rs 50,000, for a period of 30 days. Meanwhile, government has asked SBI and LIC to bail out private lender which has stressed assets of Rs  45,000-50,000 crore in its 1122 branches, by forming a consortium of banks and picking up a stake - 24.5 percent stake each. bank was reconstituted under  ‘Yes Bank Ltd. Reconstruction Scheme, 2020’ on March 17, altering authorised capital to Rs 5000 crores and 2400 equity shares standing at Rs 2 each. SBI which leads consortium of banks investing in 'reconstructed bank' will t reduce its holding below 26% before completion of three years.

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