Date: 07-03-2020
Hey My Brothers & Sisters,
Hope your Day spends Good, Let's come to our Today's topics as I mentioned in Subject.
A query I got from someone, they asked us about to write for Yesbank. A question is that If Yes Bank merged or amalgamated what happens to Yes Bank share holders?
So We are trying to answer this Question.
A query I got from someone, they asked us about to write for Yesbank. A question is that If Yes Bank merged or amalgamated what happens to Yes Bank share holders?
So We are trying to answer this Question.
- As the per the RBI order, Yes Bank will now be allowed to repay loans or advances granted against government securities or other securities to the bank by RBI or by any other bank and remaining unpaid as of Thursday.
- It would also be allowed to operate its account with RBI.
- Depositors will be restricted to a maximum withdrawal of Rs 50,000 even if they have multiple accounts
- Drafts and pay orders issued so far will be paid in full, it said.
- RBI will, however, relax the withdrawal limit in the event of medical emergencies, higher education fees or marriage expenses — up to a cap of Rs 5 lakh.
- RBI assured depositors of the bank that their interests will be fully protected and there is no need to panic.
WHAT's NEXT: POSSIBILITIES
RBI said in the absence of a credible revival plan from the bank management, and in public interest and the interest of the bank’s depositors, it had no alternative but to apply to the central government for imposing a moratorium.
““The Reserve Bank will explore and draw up a scheme in the next few days for the bank’s reconstruction or amalgamation and with the approval of the central government, put the same in place well before the period of moratorium of 30 days ends so that the depositors are not put to hardship for a long period of time,” it said.
““The Reserve Bank will explore and draw up a scheme in the next few days for the bank’s reconstruction or amalgamation and with the approval of the central government, put the same in place well before the period of moratorium of 30 days ends so that the depositors are not put to hardship for a long period of time,” it said.
Scenario One:-
There are reports that the government may rope in Life Insurance Corporation of India (LIC) to join a consortium led by State Bank of India to buy a stake and inject funds in beleaguered lender. It remains to be seen if that can materialize. The state-owned insurer already owns 51 per cent of IDBI Bank after a stake purchase from the government.
IRDAI rules allow an insurer to hold only 15 per cent equity stake in an entity to ensure there is no concentration of risks. In June 2018, the insurance regulator made an exception to allow LIC to hold 51 percent in IDBI Bank.
LIC is headed for an initial public offering in FY21, and it may not want to create an adverse perception among investors ahead of a public float, by playing 'white knight' and bailing out yet another ailing entity.
But should such a deal happen and LIC becomes a major part of the consortium to acquire a large stake in the lender, it may open up the possibility for an eventual merger of YES Bank and IDBI Bank, because the insurer has already been looking at options to unlock value in IDBI Bank.
Scenario Two: -
Another report said the board of SBI has agreed to conduct a viability assessment into buying a stake in troubled private sector lender. This is being referred to as a commercial decision.
Such a capital infusion would immediately be followed up by a cleanup of the bank’s balance sheet. Yes Bank’s exposure to commercial businesses will also be looked at. It is likely that the current management, including the Managing Director and CEO Ravneet Gill, would be replaced, said one report.
It is possible that the newer investors will come in, rescue the lender and turn it into an attractive investment proposition and then sell it off.
It is possible that the newer investors will come in, rescue the lender and turn it into an attractive investment proposition and then sell it off.
So That's it for the Blog guys, We have tried our best to Reply the Question.
If you are satisfies with answer please Comment below.
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