Good Response from Investors, Recapitalisation of Yes Bank First Priority, Says SBI Chairman Rajnish Kumar

New Delhi: Chairman of State Bank of India (SBI) Rajnish Kumar in an interview to News18 said that their first priority will be recapitalisation of the stressed bank and have received positive responses from several investors.

“There's a very good response, all the ends are being tied... we'll tell RBI soon that these are the people who are willing to invest along with SBI. We are working on recapitalisation now, we will notify RBI with our required investment after talking with co-investors,” said Kumar.

He further informed that the process of recapitalisation will begin once the moratorium is lifted and the new management takes over.

SBI will be investing Rs 2,450 crore which can later balloon to Rs 10,000 crore in order to buy 49 per cent in Yes bank.

The Reserve Bank of India (RBI) had on Friday placed in public domain a draft scheme of reviving Yes Bank, the public lender which has been put under the control of the Central bank.

On why no other private bank is interested in the opportunity he said, “There were efforts last year whether any private bank would acquire Yes bank but the size of Yes bank is fairly large. Except for HDFC, trying to acquire Yes bank would be difficult.”

The SBI chief also said that they did not want Yes bank to be their subsidiary. “We don't want 51 per cent stakes. We don't want it to be a subsidiary. Our whole intention is to give confidence to depositors. Credible name of SBI is supporting Yes bank at this need of the hour,” he said.

RBI has imposed a moratorium on the bank, restricting withdrawals to Rs 50,000 per depositor till April 3. The RBI also took over the bank’s board of directors.

Yes Bank’s finances have been undergoing a steady decline largely due to its inability to raise capital. The bank has also experienced serious governance issues in the recent past.

The fifth largest private lender has struggled to raise capital it needs to stay above regulatory requirements as it battles high levels of bad loans. It has been trying to raise USD 2 billion in fresh capital since late last year, and in February delayed its December-quarter results.