The private sector lender, YES bank on Tuesday announced that its board has made its mind and approved the raising of funds for an amount up to Rs 10,000 crore. In its filing, the bank mentioned that it will be seeking the approval of its shareholders, which in effect would result in seeking an extension on current shareholder approval which is set to expire on February 28, 2022.
The shares of YES bank saw a rise of 2.35% today. YES Bank in recent years has been undergoing a steady decline because of its inability to raise capital which has put its depositors into jeopardy.
A stock exchange notification read: “In terms of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other applicable provisions, if any, the Board of Directors of the Bank in its meeting held on June 10, 2021, have, inter alia, considered and approved seeking shareholders’ approval for borrowing/raising funds in Indian/foreign currency up to Rs 10,000 crore by issue of debt securities including but not limited to non-convertible debentures, bonds, Medium Term Note (MTN), etc., in terms of Section 42, 71 and other applicable provisions of the Companies Act, 2013 read with Companies (Prospectus and Allotment of Securities) Rules, 2014, SEBI (Issue and Listing of Debt Securities) Regulations, 2008, the SEBI Listing Regulations and other applicable laws, if any, subject to regulatory approvals, as may be required.”
India’s fifth-largest private bank has effectively been taken over by the state. In 2020 around March, the Reserve Bank of India (RBI), which is the prime regulating body under the jurisdiction of the ministry of finance, put YES Bank under a moratorium. It suspended its board, installed a new Chief Executive Officer and indicated that there was a path forward.
The RBI had then announced a reconstruction plan for the bank, to protect those who have deposits, but a significant share of this ownership was snatched and given over to another “investing bank”, anticipated to be the public sector bank- State Bank Of India (SBI).