Head of the SBI: Willing to invest up to 10 billion rupees to “rebuild” Yes Bank
Leaving aside a direct response on whether LIC would be investing with SBI, Kumar said: “Many investors, national and international, have shown interest in the reconstruction of Yes Bank … There are 2-3 good names.”
While acknowledging, in an interaction with the media, that the limit of Rs 50,000 in cash withdrawals “will be inconvenient for a few days,” Kumar assured Yes Bank depositors that their money was not at risk.
When asked how much SBI is willing to commit to rebuilding Yes Bank, Kumar said that if the bank is left alone and collects all 49%, the RBI allows it under the preliminary scheme, its immediate investment, based on the current base of capital, would be Rs 2,450 million rupees; If Yes Bank needs Rs 20,000 crore and authorized capital is raised accordingly, then SBI’s investment would have been around Rs 10,000 crore. “Our minimum commitment is 26%, with a three-year blockade, which will be around Rs 5.2 billion rupees,” Kumar said. “Anything above that, up to 49%, will depend on the interests of other investors and the bank’s capital requirement.”
The OSE president defended the decision to rescue a private sector bank saying there was a risk of contagion if it failed. He pointed out that even in the “temples of capitalism,” governments had to present rescue packages in the form of a purchase of troubled assets of $ 2 billion in the United States and a bank recapitalization of £ 50 billion in the United Kingdom.
When asked if Yes Bank’s problems had not damaged the brand, Kumar said: “We must clearly distinguish … Yes Bank is an entity, Rana Kapoor is an individual. If an individual has done something wrong, he will pay the price for That, why should the company suffer?
As to whether his investment in Yes Bank could adversely affect SBI’s finances, he said: “We have made our calculations. There will be a very marginal impact on our capital adequacy. We have a policy of maintaining our capital adequacy ratio in half a percentage. about the legal requirement. This will not change, ”Kumar said.
On the possibility of a conflict of interest between the two banks, Kumar said: “Once a new board and CEO is established at Yes Bank, SBI would maintain an independent relationship and convey its expectations through the new board.”