'Govt taking strict action, SBI moving in that direction': RS Prasad on Yes Bank crisis

Union Law and Justice Minister Ravi Shankar Prasad on Sunday said that the government has initiated strict action regarding the Yes Bank crisis. He alleged that the loans that have resulted in this situation of Yes Bank were given when the Congress party was in power at the Centre.

'SBI is moving in that direction'

Speaking to media in Patna, when asked about the Yes Bank crisis, Ravi Shankar Prasad said, "The government is taking strict action. The State Bank of India is moving in that direction. "Finance Minister Nirmala Sitharaman has said that the loans that have resulted in this situation of Yes Bank were given when Dr Manmohan Singh was the Prime Minister of the country and the Finance Minister was P Chidambaram."

The Enforcement Directorate (ED) on Sunday arrested Yes Bank’s former Chairman and founder Rana Kapoor on charges of money laundering. The arrest, under the Prevention of Money Laundering Act, comes after 30 hours of intense questioning. Kapoor is accused of receiving kickbacks from various corporate entities on disbursal of loans. He has been sent to Enforcement Directorate custody till March 11 by Mumbai's special holiday court.

'This will be 49% of the share capital'

The State Bank of India (SBI) on Saturday announced it will pick up a 49% stake in Yes Bank for Rs 2,450 crore and clarified that all the deposits and liabilities of the reconstructed bank will continue in the "same manner".

"Yes Bank has 255-crore shares of Rs 2 per share. SBI will be issued 245 crore shares at a price of Rs 10 per share for Rs 2,450 crore. This will be 49% of the share capital of the reconstructed bank," the State Bank said in a statement. "SBI shall not reduce its holding below 26% before completion of three years from the date of infusion of the capital," it added.

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The Reserve Bank of India (RBI) had said that a moratorium has been imposed on Yes Bank, stressing that the bank's financial capability has undergone a steady decline largely due to the inability of the bank to raise capital. During the period of moratorium, Yes Bank Ltd will not, without the permission in writing of the RBI, make in the aggregate, payment to a depositor of a sum exceeding Rs 50,000 lying to his credit in any savings, current or any other deposit account.

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(With agency inputs)