The Reserve Bank (RBI) and the Ministry of Finance will surely claim credit for their handling of the Yes Bank crisis, as its stocks have risen 1,000% against its minimum level in just seven trading sessions. On 6 March, its stock price had sunk to Rs 5.65 during trading. Currently, the stock is bouncing daily and it is trading beyond Rs 57. Moody’s has marked the Yes Bank stock outlook as positive.
On 5 March, the day when the RBI announced a one-month moratorium for the then sick bank’s customers who were stopped from withdrawing more than Rs 50,000 at a time, its stock was close to Rs 37. The next day, it fell sharply by 56% and closed at Rs 16.
Before the matter turned irredeemable, the RBI dissolved the board of Yes Bank and set up its representative. From then onwards, the stocks started gaining momentum. The RBI said the bank would be restructured within a month, after which SBI, the country’s largest public sector bank, said it would invest Rs 2,450 crore in the ravaged bank. This was the announcement after which the trust of investors and depositors returned.
SBI went on to decide to invest a whopping Rs 7,250 crore while HDFC and ICICI said they would invest Rs 1,000 crore each in Yes Bank. Axis Bank will invest Rs 600 crore, Kotak Bank will put in Rs 500 crore, Bandhan Bank Rs 300 crore, Federal Bank Rs 300 crore and IDFC Bank will buy equities worth Rs 250 crore.
Dealings of Yes Bank under Rana Kapoor
In the meantime, even as the Enforcement Directorate (ED) summoned some top industrialists like Essel Group promoter Subhash Chandra, Jet Airways founder Naresh Goyal and Indiabulls chairman Sameer Gehlaut for their alleged dealings with Yes Bank under Rana Kapoor, investors lined up for the hitherto beleaguered bank, taking a cue from the SBI.
Finance Minister Nirmala Sitharaman had held a press conference on 6 March where she unexpectedly named businessmen suspected to have made unethical and illegal deals with the bank. She said Anil Ambani’s Group, the Essel Group, DHFL, ILFS and Vodafone were among the losers who took loans from Yes Bank.
The officials accompanying the finance minister said that the promoters of the companies who failed to repay the loans to Yes Bank had been summoned for questioning.
Reliance Group said last week that its loan from Yes Bank was fully secured. The group has promised to repay the loan from the sale proceeds from its assets.
Rana Kapoor is currently in ED custody. He was arrested earlier this month.
In another development, Kapil Wadhawan, chairman and managing director of DHFL, arrested by ED, will also be questioned.
The ED has accused Kapoor, his family members and others of laundering the ‘proceeds from crime’ worth about Rs 4,300 crore. The money was allegedly taken from Yes Bank in lieu of large loans. These loans later became non-performing assets (NPAs). 44 companies of 10 big business groups have a stake of Rs 34,000 crore in the bad loans of the ailing bank.
According to the scheme of SBI, after the restructuring, all the banks will together collect funds of Rs 30,000 crore to maintain liquidity in Yes Bank so that it functions smoothly. This is expected to send a positive message to the small depositors and they do not withdraw the deposits from the bank after the moratorium period.
There is some good news for the depositors that the moratorium period will end after 6 PM on 18 March.