Government Mission to save Yes Bank ( latest & breaking news for LIC, SBI Bank)

MUMBAI: State Bank of India (SBINSE -6.30 %) will submit its rescue plan for Yes BankNSE 31.58 % within a week to the Reserve Bank of India (RBI) that will likely entail a maximum investment of Rs 6,000 crore for a 26% stake. The plan may involve a similar amount to be invested by a group of global investors, said people aware of the matter. The RBI is also firming up plans to provide liquidity support of at least Rs 8,000-10,000 crore to stem any flight of deposits once the moratorium on Yes Bank is lifted.


The brunt of corporate governance lapses by the founder-promoter of Yes Bank, and the new management's inability to bring in requisite capital to clean up the books had to be borne by its shareholders.

Matters took a serious turn late last week after the bank's board was superseded by the RBI and a moratorium was imposed. Soon after, the private lender's shares crashed as the SBI was expected to pay a pittance for the rescue operation.

But, since then, the RBI has come up with a reconstruction scheme for Yes Bank’s rescue. With this, will the shares of Yes Bank rise from the ashes?

Moneycontrol's Sakshi Batra does a 3-Point Analysis of what this will mean for the shareholders of Yes Bank.


Yes Bank has enabled inward IMPS/NEFT services. This means people can now use other bank accounts to send payments to Yes Bank accounts through IMPS/NEFT.

The private lender has informed via its official Twitter account that people can now make payments towards Yes Bank credit card dues and loan obligations.


The government is not considering to bring other private sector lenders under scrutiny in the aftermath of Yes Bank crisis that has left lakhs of customers worried if their hard earned money is really safe in banks. "There is no such plan," said an official source when asked if the Yes Bank crisis preceded by Punjab and Maharashtra Co-operative (PMC) bank debacle calls for scrutiny of other lenders also.

The official said that there has been timely action on part of both the government as well as the Reserve Bank of India (RBI).

"The bailout plan has also been announced, so this will be contained," said the official.


  • At the end of the December quarter, LIC, which already holds 8.06% in Yes Bank, had an exposure of 8,051 crore to the lender's debt instruments
  • 'There are many potential investors who have approached us after seeing the scheme of reconstruction for Yes Bank,' said SBI Chairman on Saturday
  • This can help to increase capital infusion under the draft reconstruction scheme to rescue Yes Bank designed by the Reserve Bank of India, which was made public on Friday.

    News agency IANS quoted official sources as saying that RBI, SBI and finance ministry officials were in touch with the insurer to see its interest to participate in the scheme. LIC spokesperson, however, could not be reached for comments.

    "There are many potential investors who have approached us after seeing the scheme of reconstruction for Yes Bank," said SBI Chairman Rajnish Kumar on Saturday.

    LIC already holds 8.06% in Yes Bank.

According to CBI's FIR, "Rana Kapoor entered into a criminal conspiracy with Kapil Wadhawan and others for extending financial assistance to DHFL by Yes Bank Limited in lieu of substantial undue benefits to himself and his family members through the companies held by them. During April to June 2018, Yes Bank invested Rs 3,700 crore in short term debentures of DHFL. Simultaneously, Wadhawan paid Rs 600 crore to Kapoor and his family members in the garb of a loan of Rs 600 crore given by DHFL to DOIT Urban Ventures Pvt Limited (A Rana Kapoor Group Company)."

The ED is also expected to record statements of suspects in the case. These locations were earlier raided by the ED. The ED has taken cognisance of CBI's FIR and has lodged a money-laundering case against Kapoor. Sources said that the CBI is also in touch with the finance ministry, the RBI and other government agencies in connection with the case. Kapoor, who was placed under arrest at 3 am on Sunday under the provision of the Prevention of PMLA has been sent to ED's custody till March 11.

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