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YES Bank gets majority vote of shareholders for Rs 10,000 cr fund mop-up

NEW DELHI: YES Bank on Tuesday said its shareholders have approved a proposal for raising Rs 10,000 crore capital with the requisite majority.

As many as 98.78 per cent votes were cast in favour of the resolution to authorise the bank to raise capital through issuance of equity shares or other securities, YES Bank said in a regulatory filing.

“We would like to inform that the special resolution…has been approved by the members with requisite majority,” YES Bank said.

On January 22, while declaring its financial results for quarter ended December 31, 2020, YES Bank had informed about Rs 10,000 crore fund raise plan through various modes.

In its notice for the postal ballot on the capital raise plan, the bank said that it wants to further strengthen the common equity tier 1 (CET 1 or core capital) ratio and to ensure that it has enough capital to support growth and maintain adequate buffers to deal with any unforeseen impact. And it had proposed to raise equity capital not exceeding Rs 10,000 crore.

The bank intends to raise the capital through various modes including a Qualified Institutions Placement (QIP), from international markets through ADRs/GDRs; foreign currency convertible bonds or any other securities which are convertible into exchangeable with equity shares, in Indian rupee or foreign currency or a public issue.

YES Bank had gone through a Reconstruction Scheme in March 2020, under the RBI and government oversight. Under this scheme, it had raised Rs 10,000 crore capital which was contributed by State Bank of India (SBI) and seven other domestic financial institutions.

Further, within four months of its reconstruction, YES Bank had successfully raised Rs 15,000 crore through a further public offer (FPO) in July 2020.

Citing that Covid-19 pandemic impacted many businesses across the country, YES Bank said a stronger capital base would further strengthen the bank’s ability to deal with unanticipated contingencies or market disruptions which may arise due to Covid-19 pandemic.

“Lending opportunities for the well capitalised banks continues to be strong and the bank needs to be well positioned to cater to the growth in its new journey. In addition, regulatory requirements for equity capital continue to increase with the adoption of Basel III requirements by the Reserve Bank of India,” the bank had said in January.

As per this roadmap, the minimum CET 1 ratio stands increased to 8 per cent and minimum tier I ratio to 9.5 per cent effective April 1, 2021.

As per the result of the postal ballot which happened through remote voting due to the pandemic protocol, bank’s scrutinizer said it restricted SBI alongwith its subsidiary and associate enterprises shareholding to 6,51,42,75,555 equity shares constituting 26 per cent of the total shareholding of YES Bank.

SBI and its group entities hold 7,75,59,00,250 equity shares constituting 30.96 per cent of the equity share capital in YES Bank.

However, as per norms SBI along with its subsidiary and associate enterprises are entitled to exercise only 26 per cent of the total voting rights in the private sector lender.

YES Bank stock closed flat at Rs 16.30 apiece on BSE.

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