The new team at Yes Bank has managed to raise some funds quickly after taking charge. The information is the troubled bank has received ₹7,000 crore in two tranches of ₹3,500 crore each through certificate of deposits (CDs), in the past one week. It was only on March 26 that the newly constituted board of Yes Bank passed a resolution authorising the raising of up to ₹15,000 crore of funds to strengthen the bank’s capital. This is over and above the ₹10,000 crore that was pumped in by several banks, led by the State Bank of India. SBI now owns 48.2% equity in Yes Bank.
The private sector bank promoted by Rana Kapoor, who is now under investigation by the central agencies on multiple allegations when he had been in control, now has a new 8-member board of directors.
The new non-executive Chairman is Sunil Mehta, a former Chairman of Punjab National Bank. Prashant Kumar is the MD and CEO. Kumar had been appointed by the RBI as the administrator when it superseded the previous board and placed a moratorium on the withdrawals triggering a panic-like situation.
The other directors are R Gandhi, a former RBI Deputy Governor, Ananth Narayan, an academic. These two are additional directors. SBI has brought in two of the Deputy MDs, J Swaminathan and Partha Pratim Sengupta. There are two non-executive directors, Mahesh Krishnamoorthy and Atul Bheda appointed by the government.
When RBI announced a plan for reconstruction of Yes Bank, it had assured that the employees of the bank will continue for a year without any changes in their positions or remunerations. Some of the senior executives in the bank may however be shuffled or reassigned by the new board in its sittings in the coming days. The board has been given the powers to remove some officers if it finds necessary.
Yes Bank has been seriously impacted by this episode with many depositors choosing to withdraw their monies from the bank. It has been reported that from ₹2.09 lakh crore in September 2019, the banks’s deposits figure is down to ₹1.37 lakh crore. The bank has committed itself to recover up to ₹10,000 crore of outstanding loans within this financial year. The bank’s profitability etc. will certainly come under a lot of pressure with the cost to income ratio shooting up to 100.4%. It stood at 44% just a year ago.
The Yes Bank stock quoted at ₹23.95 on BSE when last traded.