Mission to save Yes Bank: SBI to submit rescue plan to RBI in a week

MUMBAI: State Bank of India (SBI) will submit its rescue plan for Yes Bank 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.“RBI governor Shaktikanta Das and SBI chairman Rajnish Kumar met on Monday to firm up the plans on Yes Bank’s reconstruction scheme. Liquidity support from the RBI for Yes Bank is also on the anvil,” said one of persons. “The RBI liquidity line could be against a pledge of securities of a similar value. The details are being worked out.”RBI-appointed administrator Prashant Kumar confirmed that Yes Bank had the support of RBI and SBI. “We have full support from the RBI as far as liquidity is concerned. There is no issue whatsoever,” he said.ET reported March 9 that SBI is in talks with more than half-a-dozen investors, including Blackstone, Brookfield, Carlyle, TPG, KKR, JC Flowers and Goldman Sachs, for a potential investment in Yes Bank. The plan is to infuse fresh equity into the bank and have three-four marquee investors along with SBI and a few domestic institutions and individuals. SBI is keen to have external investors put in as much as Rs 15,500 crore but the timeline of one week is believed to have deterred some.74559530 The SBI chairman had said Saturday that there was interest from several investors and, at a base price of Rs 2,450 crore, an investment in the bank made sense. “Many potential investors have approached us after seeing the scheme… There are some very good names,” Kumar had said.Bank will Need Rs 22,000 croreThe RBI, which superseded the Yes Bank board and imposed a 30-day moratorium on Thursday, announced a draft reconstruction plan that entails an equity investment of up to 49% by SBI.As per RBI’s draft scheme, the state-owned lender is required to hold a minimum 26% in Yes Bank for at least three years. Analysts estimate that the maximum of Rs 10,000 crore that SBI plans to invest in Yes Bank is less than half of what it needs to stay afloat. The beleaguered bank will need at least Rs 22,000 crore, half of which will have to come from non-SBI investors. The magnitude of the provisions required by the bank has prevented investors from infusing funds in the past.

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