The country's largest lender State Bank of India (SBI) on Thursday said that its board had approved a plan to purchase 725 crore Yes Bank shares at a price of Rs 10 apiece. The announcement comes days after the Reserve Bank of India (RBI) suspended the troubled private sector lender's board and restricted withdrawals from its accounts till April 3. Struggling under a growing pile of bad debt, Yes Bank had been trying to raise the capital it needed to stay above regulatory requirements.
In a regulatory filing to BSE after market hours on Thursday, SBI said the decision was approved by its Executive Committee of Central Board (ECCB) in a meeting held on March 11.
SBI also said its shareholding in Yes Bank will remain within 49 per cent of its paid-up capital.
Last week, the Reserve Bank of India (RBI) brought out a draft restructuring plan for Yes Bank.
Meanwhile, SBI chairman Rajnish Kumar told NDTV on Monday the moratorium imposed on Yes Bank could be lifted this week.
The equity markets entered a bear phase on Thursday, with benchmark indices Sensex and Nifty tumbling more than 8 per cent each, and suffering their worst day ever in absolute terms.
SBI shares dropped 13.23 while Yes Bank shares ended 13.02 lower for the day. Those losses were in line with a 9.50 per cent fall in the Nifty Bank index, which comprises stock of 12 major banks in the country including SBI and Yes Bank.