New Delhi: The government has given the go-ahead to State Bank of India and other financial institutions to take over the capital-starved Yes Bank, and an announcement is likely to be made soon, highly placed sources said Thursday.
The board of SBI, the country’s largest lender, is currently meeting in Mumbai, but it could not be immediately ascertained whether takeover of Yes Bank is on the agenda.
Yes Bank, which is grappling with bad loans, is looking to raise fresh capital but the plans are facing uncertainties. It has also delayed announcement of 2019 December quarter results due to the ongoing crisis.
The sources said the government has cleared a plan for a SBI-led consortium to acquire a controlling stake in the bank. In a clarification to stock exchanges on reports that the government is said to have approved SBI’s plan to buy stake in Yes Bank, the state-owned lender said it would disclose developments, if any, as per Sebi regulations.
Yes Bank however, said it would like to clarify that as on date, it has not received any such communication from RBI or any other government or regulatory authorities or from the SBI.
“… we are unaware of any such decision. Therefore, we are not in a position to comment on such news item,” Yes Bank said in a filing to the stock exchanges.
Yes Bank has been passing through a tumultuous period ever since the Reserve Bank of India (RBI) , in August 2018, asked the then chief executive Rana Kapoor to leave by January 31, 2019, amid concerns on governance and loan practices.
Under his successor Ravneet Gill, the lender has disclosed large under reported stressed assets. The bank reported its maiden loss in the March 2019 quarter.
Mumbai-headquartered Yes Bank was incorporated in 2004. The bank’s asset size stood at Rs 3,71,160 crore at the end of June 2019.
Shares of Yes Bank jumped nearly 26 per cent to Rs 36.85 apiece in late afternoon trade on the BSE.