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Private sector lender ICICI Bank has announced on Friday that its board has approved investing Rs 1,000 crore in the cash strapped Yes Bank.
In lieu of this investment, ICICI Bank will get 100 crore equity shares at a price of Rs 10 per share, under the proposed Scheme of Reconstruction of Yes Bank Limited under the Banking Regulation Act, 1949, subject to regulatory and government approval, the bank said in an exchange filing with the BSE.
“This investment is likely to result in ICICI Bank Limited holding in excess of 5.0% shareholding in Yes Bank Limited, with the final shareholding to be determined based on the final Scheme of Reconstruction and share issuance thereunder,” ICICI Bank said in its filing.
ICICI Bank is the second banking entity after public sector banking behemoth State Bank of India (SBI), to invest in the struggling private sector lender. SBI on Wednesday had said it will buy shares worth Rs 7,250 crore in Yes Bank.
The struggling private sector lender was put under a moratorium last week by the Reserve Bank of India (RBI) following a serious deterioration in the bank’s financial position. Subsequently, the central bank had also capped all withdrawal limits to Rs 50,000 per month.
The next day, the central bank had unveiled a reconstruction scheme that suggested a clear possibility of SBI acquiring a 49 per cent equity stake in the private sector lender.
The rescue plan for Yes Bank involves SBI buying a stake in the troubled lender along with a consortium of other investors.
