The Reserve Bank of India (RBI) has come up with a scheme of revival Yes Bank, the public lender which has been put under the control of the central bank.
The move comes after the RBI placed Yes Bank under a moratorium a month-long moratorium in order to assure that the interest of the depositors of Yes Bank is fully protected without any panic amongst the depositors. The RBI named Prashant Kumar, SBI’s former chief financial officer, as Yes Bank’s administrator.
As per the draft, the authorised capital shall stand altered to ₹5,000 crores and the number of equity shares will stand altered to ₹2400 crore of ₹2 each.
Further, the investor bank shall agree to invest in the equity of reconstructed Yes Bank to the extent that post-infusion it holds 49% shareholding in the reconstructed bank at a price not less than ₹10 (face value of ₹2) and premium of ₹8.
It was further specified that the office of the administrator of Yes Bank, appointed by the Reserve Bank, shall stand vacated, and a new board will be constituted from the appointed date.
The investor bank shall have two nominee directors appointed on the board of the reconstructed Yes Bank.
RBI may appoint additional directors on the board of Yes Bank. It will be open to the board of directors of Yes Bank to co-opt more directors.
The existing employees of the reconstructed Bank can continue in the service with the same remuneration and on the same terms and conditions of service (T & C), including terms of determination of service and retirement, as were applicable to such employees immediately before the appointed date, at least for a period of one year.
The draft also specifies that the board of directors of reconstructed Yes Bank will, however, have the freedom to discontinue the services of the key managerial personnel (KMPs) at any point of time after following due procedure.
The draft is submitted to the public domain for suggestions and comments from the public including banks, depositors and creditors till 9th March 2020. The draft scheme has also been sent to Yes Bank and SBI for their comments.
Subscribe Taxscan Premium to view the Judgment
