IDFC First Bank has joined RBI’s reconstruction scheme led by SBI to save Yes Bank. IDFC First has invested Rs 250 crore in Yes Bank.
So far, several private banks together have invested Rs 3,950 crore in Yes Bank. In a regulatory filing, Yes Bank stated that 3,95,00,000 equity shares have been issued on its behalf.
Yes Bank has allocated 1,000 crore of its equity shares to seven banks including the State Bank of India (SBI). The total value of these shares is Rs 10,000 crore.
The bank that had collapsed due to the alleged fraudulence of its founder Rana Kapoor would have cost the people of India a lot of money because of the government’s decision to save the bank if the private sector banks had not pitched in. Yet, the SBI becoming the largest stakeholder implies that people’s money is still at stake.
605 crore shares of Yes Bank go to SBI
SBI got 605 crore shares for Rs 6,050 crore. Following this move, SBI will have a 49% stake in Yes Bank. According to RBI’s rescue scheme, SBI will not be able to reduce its stake in Yes Bank to less than 26%.
ICICI Bank has announced an investment of Rs 1,000 crore in Yes Bank. ICICI Bank bought 100 crore equity shares at Rs 10 per share.
Axis Bank will invest Rs 600 crore and Kotak Mahindra Bank will invest Rs 500 crore.
Apart from this, Bandhan Bank will invest Rs 300 crore in Yes Bank.
IDFC First Bank said on Sunday that it would invest Rs 250 crore in Yes Bank. Through this investment, IDFC Bank will acquire 25 crore shares of Yes Bank. The BSE filing on behalf of the bank said that the Board of Directors had approved this investment of Rs 250 crore on 14 March.
IDFC First Bank purchased this equity at the rate of Rs 10 per share, with a face value of Rs 2 per share.
Earlier on Saturday, Federal Bank had announced an investment of Rs 300 crore in Yes Bank. Federal Bank will buy 30 crore shares of the crisis-ridden bank.
75% shares to be locked-in
Investors putting their money in private banks have been given a condition that they will have to keep 75% of their total investment in the bank in the lock-in period. This implies if you buy more than 100 shares of Yes Bank, 75% of these shares will be locked in for 3 years. That is, you will not be able to sell these shares for three years. However, if an investor has less than 100 shares, he can sell all his shares.
A lock-in period is a period during which investors cannot sell a property. For example, if you have 100 shares of Yes Bank, you will be able to sell only 25 shares if the rate increases or decreases. You will not be able to sell 75 shares for the next three years. The amount invested in the lock-in is blocked for a certain period of time.