Best printers for Home

Best Mixer Grinder

Best wired Earphones

Best 43 Inch TV in India

Best Wi Fi Routers

Best Home Theatre in India

Smart Watch under 5000

Best Laptops for Education

Best Laptop for Students

IDFC First Bank on Sunday said it will make an equity investment of Rs 250 crore in beleaguered Yes Bank to acquire 25 crore equity shares. "...duly authorized committee of the Board of Directors of IDFC FIRST Bank Ltd had at its meeting held on March 14, 2020 accorded approval for an equity investment of upto Rs 250 crores comprising upto 25 crore equity shares at a price of Rs 10 each and face value of Rs 2 each, under the proposed Scheme of Reconstruction of Yes Bank Ltd under the Banking Regulation Act, 1949, subject to regulatory and government approval(s), if any," the bank said in a BSE filing. Earlier on Saturday, Federal Bank had committed to investing Rs 300 crore in Yes Bank for subscription of its 30 crore shares. The Centre on Saturday notified the YES Bank Limited Reconstruction Scheme, 2020, a day after the Union Cabinet approved a reconstruction plan proposed by the RBI for bailing out fund-starved Yes Bank. The authorised capital of Yes Bank has been increased to Rs 6,200 crore, Finance Minister Nirmala Sitharaman said on Friday. As per the reconstruction scheme, moratorium on the troubled lender will be lifted on March 18. Under the plan, state-run SBI will infuse Rs 7,250 crore in the crisis-ridden bank and take 49 per cent equity. As per the rescue plan, ICICI Bank will invest Rs 1,000 crore, mortgage lender HDFC Rs 1,000 crore, Axis Bank Rs 600 crore, Kotak Mahindra Bank Rs 500 crore, Bandhan Bank and Federal Bank Rs 300 crore each. There will be a three year lock-in period for all the investors. However, the lock-in period for SBI would be only for 26 per cent of shareholding. It would be 75 per cent in case of other investors. KKS RVK

Yes Bank gets Rs 250 crore from IDFC First Bank

Before the Reserve Bank of India put in a limit of ₹50,o00 on withdrawals by depositors in Yes Bank, the shares of the private bank zoomed nearly 27% on March 5 on source-based reports that the government has asked the State Bank of India (SBI) to lead a consortium to buy stake in Yes Bank. 
 <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[
<div class="flourish-embed flourish-chart" data-src="visualisation/1515287"></div>
]]></cdata></div>

 However, the midnight statement from SBI, the country's largest bank, was far more non-committal than what investors of Yes Bank would hope for. SBI and the Life Insurance Corporation of India (LIC) will acquire shares at ₹2 per share. The two state-run companies will acquire 49% stake for a total of ₹490 crore, the Economic Times reported citing sources. However, SBI seems to be approaching Yes Bank with more than adequate caution. "No such negotiations/events took place. However, the matter in regard to Yes Bank was discussed at the meeting of the Central Board of the Bank on March 5 and an in-principle approval has been given by the Board to explore investment opportunity in the Bank," the <a href="https://www.bseindia.com/xml-data/corpfiling/AttachLive/477eac4e-fa44-4a91-82e8-7394795624d4.pdf" data-type="tilCustomLink" target="_blank">SBI response to the exchanges said</a>. 
 <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[
<div class="flourish-embed flourish-chart" data-src="visualisation/1516180"></div>
]]></cdata></div>

 In essence, SBI is saying that it will explore the possibility of investing in Yes Bank but it is no way a certainty. This is yet another example of how investors, particularly the small investors, have been trapped buying shares of Yes Bank based on rumours. Between June and September 2019, the public stake in Yes Bank has more than doubled as people bought the bank's shares hoping to make a quick buck while the big investors including institutions offloaded their stake in the bank that was slowly sinking into an abyss. Global brokerage JP Morgan reportedly said that the bailout will come at a large cut for equity holders. "We believe forced bailout investors will likely want the bank to be acquired at near zero value to account for risks associated with the stress book and likely loss of deposits (Q3 financials have still not been disclosed)," it said, according to an IANS report. Aside from this, people who have money deposited in Yes Bank accounts found themselves stuck as some ATMS, and even net banking including the mobile app did not function soon after the RBI announced the moratorium. SEE ALSO: <a href="https://www.businessinsider.in/finance/news/yes-bank-mobile-and-net-banking-down-after-rbi-limits-withdrawals-to-50000/articleshow/74499754.cms" data-type="tilCustomLink" target="_blank">Yes Bank mobile and net banking down after RBI limits withdrawals to ₹50,000</a> <a href="https://www.businessinsider.in/finance/news/yes-bank-mobile-and-net-banking-down-after-rbi-limits-withdrawals-to-50000/articleshow/74499754.cms" data-type="tilCustomLink" target="_blank">Yes Bank under CEO Ravneet Gill⁠— eight months of wild mood swings</a>

SBI statement on proposed Yes Bank bailout is far from reassuring

Shares of Yes Bank on Monday zoomed over 30 per cent after State Bank of India (SBI) said it will pick up 49 per cent stake in the cash-strapped lender for Rs 2,450 crore. The scrip witnessed a sharp rise, spiking 29.63 per cent to Rs 21 on the BSE. On the NSE, it jumped 32.20 per cent to Rs 21.35. SBI on Saturday announced it will pick up a 49 per cent stake in Yes Bank for Rs 2,450 crore and clarified that all the deposits and liabilities of the reconstructed bank will continue in the "same manner". "Yes Bank has 255-crore shares of Rs 2 per share. SBI will be issued 245 crore shares at a price of Rs 10 per share for Rs 2,450 crore. This will be 49 per cent of the share capital of the reconstructed bank," the State Bank said in a statement. SBI Chairman Rajnish Kumar had earlier said that it had set a maximum investment limit of Rs 10,000 crore for Yes Bank reconstruction process. SBI shares were trading over 4 per cent lower at Rs 258.50 on the BSE. Yes Bank has been struggling to raise capital amidst its dwindling financial health. It sought to raise USD 2 billion initially during this fiscal, which was then pruned to USD 1.2 billion as it could not rope in any investor. See also: <a href="https://www.businessinsider.in/finance/news/finance-minister-assures-employment-and-salary-at-yes-bank-at-least-for-one-year/articleshow/74514015.cms">Finance Minister assures employment and salary at Yes Bank at least for one year</a> <a href="https://www.businessinsider.in/finance/news/yes-bank-share-price-falls-10-after-rbi-limits-withdrawals/articleshow/74504094.cms">Yes Bank share price nose dives 72% after RBI limits withdrawals</a> <a href="https://www.businessinsider.in/finance/news/rbi-has-a-new-scheme-to-rescue-yes-bank-will-be-released-shortly-says-shaktikanta-das/articleshow/74506268.cms">RBI has a new 'scheme' to rescue Yes Bank — will be released shortly, says Shaktikanta Das</a>

Yes Bank shares shoot up by 30% after SBI decides to buy stake

Mumbai, Apr 18 () Industry lobby Ficci has sought a bailout package for the domestic aviation industry, including direct cash support from the government, interest-free soft loans and a two-years tax holiday to help the sector overcome the Covid-19 crisis. It also pitched for deferment of term-loans by up to six months, 180-days credit window by the oil marketing firms and waiving of aircraft insurance premium, among others. At the same time, Ficci also urged the government not to allow the operations until all states remove the lockdowns completely, saying that the restoration of partial services will only add to the financial woes of the domestic carriers. The coronavirus pandemic has impacted aviation industry the most, with the grounding of commercial flight services fully or partially resulting in substantial losses to all stakeholders including airlines and airports. "The aviation industry is facing a crisis of unimaginable proportion due to the impact of the Covid-19 pandemic. With prolonged travel restrictions in place around the world, one of the major challenges faced by the aviation industry is a massive plunge in cash reserves as fleets remain grounded for almost a month now. "Many airline companies are on the brink of bankruptcy," Ficci Aviation Committee Chairman and President and Managing Director of Airbus India and South Asia, Anand Stanley said in his recommendations to Civil Aviation Secretary Pradeep Singh Kharola. Global airlines grouping the International Air Transport Association (IATA) estimates that almost 30 lakh jobs are at risk in the Indian aviation dependent sectors, he said in the committee's recommendations submitted to the government on Friday. In addition to cutting down flights, airlines are putting aircraft in storage, moving forward fleet retirement dates and deferring delivery of new aircraft, he said, adding what the Indian aviation industry needs to survive is an immediate bailout from the government. "We also urge the government to not remove the grounding until and unless the states also remove their lockdowns, so that people can actually travel. "If the grounding is lifted but people are still not able to freely travel, it will make the situation even worse as lessors and other creditors will then further increase the intensity of their demands thinking our revenue generation capacity is back, when it is not. Demand will not return unless lockdowns are fully removed," he said. Significantly, this is contrary to the position taken by the local carriers, some of whom were quick to announce resumption of services in a phased manner from May 4, immediately after the government extended the lockdown to May 3, in their bid to woo customers. Ficci, in its recommendations, said the deferment of EMI on term-loans should be extended upto six months and airlines should be extended interest-free soft loans for a periof of one year, besides waiving of taxes and not deferment for a period of two years. It also said that interest, penalties, delayed charges and accruals to airport operators should be waived for the airline companies, and airport operators could be adequately supported by the government to make up for the gap. Recommending that loans, loan guarantees and support or the corporate bond market by the government or the RBI, either directly to the airlines or to commercial banks are required, it said it is likely that banks may be reluctant to extend credit to airlines in the present situation in the absence of such guarantees. The corporate bond market is a vital source of cash, but the eligibility of corporate bonds support needs to be extended by the central bank and guaranteed by the government to provide access for a wider range of companies, it said. The liquidity position of all airlines will be benefited, if the interest-free unsecured credit period for payment of fuel charges to oil marketing companies is enhanced to 180 days from the current 21 days. Besides, it has also sought deferment of payment of GST for the airlines as well as rebates on payroll taxes paid to date in this year and/or an extension of payment terms for the rest of 2020, along with a temporary waiver of ticket taxes and other government-imposed levies. Ficci said financial aid in terms of reduction in airport charges, overflight fees, taxation on passengers on security, waiver on parking and landing fees should be provided along with royalties to the airports for using the infrastructure, among others. IAS ABMABM

Covid-19: Ficci seeks bailout package for aviation industry

New Delhi, Mar 13 () Cash withdrawal restrictions and other moratorium conditions on Yes Bank will be lifted within 3 days of "very soon" to be notified SBI-led bailout plan for the beleaguered lender, Finance Minister Nirmala Sitharaman said on Friday. Meanwhile, private sector lender ICICI Bank has announced to invest Rs 1,000 crore for an equity in excess of 5 per cent in the crisis-ridden bank. HDFC will also infuse Rs 1,000 crore, while Axis Bank will invest up to Rs 600 crore to purchase 60 crore shares in the bank. Sitharaman said the central bank is engaged with other financial institutions for investment as part of the scheme to resurrect Yes Bank under RBI imposed moratorium since March 5. Cash withdrawal from the bank was capped at Rs 50,000. "Today the Cabinet has approved reconstruction scheme for the Yes Bank as was proposed by the RBI," she said. "The decision to provide a reconstruction scheme keeps at its core the protection of depositors' interest, keeps at its core providing stability to Yes Bank and also keeps at its core keeping a stable financial environment, banking system," she added. The minister said the bank was being monitored for past one year. She said the State Bank of India (SBI) will invest up to 49 per cent of the equity in Yes Bank and other investors are also being invited. RBI has been engaged in lot of engagements to bring in other investors, she added. "After the notification of the scheme, within 3 (working) days the moratorium will be lifted and within 7 days, a new board will be constituted," Sitharaman said, adding that the notification will be issued "very soon". There will be two directors from the SBI on the new board of the Yes Bank. The administrator will vacate the office within 7 days of notification and new board will take charge. Following the moratorium, the RBI had superseded the board of Yes Bank and placed it under an administrator, Prashant Kumar, former deputy managing director and CFO of SBI. There will be a three year lock-in period for all the investors, she said. However, the lock-in period for SBI would be only for 26 per cent of shareholding. It would be 75 per cent in case of other investors. The authorised capital of Yes Bank too has been increased to Rs 6,200 crore "so that we can accommodate immediate and also subsequent raising of capital requirements", the finance minister said. As per RBI's draft reconstruction scheme for the bank, its authorised capital was to be Rs 5,000 crore. On Thursday, SBI said it will invest Rs 7,250 crore in Yes Bank, which is much higher than Rs 2,450 crore it had planned initially for 49 per cent stake in the private sector lender that began operations in 2004. The minister declined to comment on a query regarding write-off of AT1 (Additional Tier-1) bonds, saying the matter is in court. In a stock exchange filing, ICICI Bank said it will invest Rs 1,000 crore in Yes Bank for cash consideration. The decision on the investment, it said was taken at the board meeting of ICICI Bank held on Thursday. This investment is likely to result in ICICI Bank Ltd holding in excess of 5 per cent shareholding in Yes Bank, with the final shareholding to be determined based on the final Scheme of Reconstruction and share issuance thereunder, it added. HDFC also announced investing Rs 1,000 crore in Yes Bank for an equity stake. Meanwhile, Axis Bank said it will invest up to Rs 600 crore in Yes Bank for up to 60 crore shares as part of the reconstruction plan for the cash-strapped peer lender. "The Board of Directors of Axis Bank Ltd at its meeting held today has accorded approval to invest a sum of up to Rs 600 crore for acquiring up to 60 crore equity shares of Rs 2 each of Yes Bank Limited, for cash, at a premium of Rs 8 per equity share, under the proposed Scheme of Reconstruction of Yes Bank Limited under the Banking Regulation Act, 1949," Axis Bank said in a regulatory filing. Since the RBI action on Yes Bank, the central agencies ED and CBI have arrested Yes Bank's co-founder and former CEO Rana Kapoor for alleged money laundering and corruption, while his wife Bindu and three daughters are also being quizzed by these agencies for their role in siphoning of public funds. One of the biggest charges against Kapoor is that he illegally benefitted to the tune of Rs 3,000 crore by lending to certain troubled companies like DHFL, Anil Ambani group and Essel Group -- all the loans worth around Rs 20,000 crore that have turned into bad debt. NKD KPM MJH BKS ANZ RVK

Moratorium on Yes Bank to go soon; govt approves bailout plan

(Eds: Adding details) New Delhi, Mar 13 () <keyword id="6653" type="CITY" weightage="20" keywordseo="ICICI-bank">ICICI Bank</keyword> on Friday said it will invest Rs 1,000 crore in <keyword id="45660" type="CITY" weightage="20" keywordseo="Yes-Bank">Yes Bank</keyword> as part of the RBI's reconstruction plan for the crisis-hit lender. The decision was taken at ICICI Bank's board meeting held on Thursday. "The Board... accorded approval for an equity investment of up to Rs 10 billion in equity shares of Yes Bank Limited, comprising up to 1 billion equity shares at a price of Rs 10 per share, under the proposed Scheme of Reconstruction of Yes Bank Limited under the Banking Regulation Act, 1949, subject to regulatory and government approval," ICICI Bank said in a regulatory filing. This investment will result in ICICI Bank Ltd holding in excess of 5 per cent shareholding in Yes Bank, with the final shareholding to be determined based on the final Scheme of Reconstruction and share issuance thereunder, it added. The RBI superseded Yes Bank's board on March 5 and put the lender under a moratorium, restricting withdrawals to Rs 50,000 per account till April 3. Finance Minister Nirmala Sitharaman on Friday said the moratorium will be lifted in three days. On the cost of acquisition of shares in Yes Bank, ICICI Bank said it is for cash consideration of Rs 10 billion wherein it will acquire 1 billion equity shares of face value of Rs 2 at a premium of Rs 8 per share. ICICI Bank also clarified that this is not a related party transaction. Total assets of Yes Bank Ltd stood at Rs 3,46,576 crore as end of September 2019. The bank posted a net loss of Rs 486 crore for the first half ended September of the current fiscal year on a total income of Rs 17,421 crore. Yes Bank will on Saturday (March 14) announce its third quarter results, which was delayed amid the bank's capital raising plans. As per the RBI approved reconstruction plan for Yes Bank, the country's largest lender SBI will pick-up 49 per cent stake in the cash-strapped private sector lender by infusing Rs 7,250 crore. Also, SBI will have to maintain at least 26 per cent shareholding for three years. Briefing reporters after the cabinet meeting here, Sitharaman said the reconstruction scheme keeps at its core the protection of depositors' interest, providing stability to Yes Bank and keeping a stable financial environment and banking system. Stock of ICICI Bank closed at Rs 447.45 on BSE, up 5.28 per cent from the previous close. KPM ABM

ICICI Bank to infuse Rs 1,000 cr in Yes Bank as part of bailout plan

(Eds: Adding details) New Delhi, Mar 13 () ICICI Bank on Friday said it will invest Rs 1,000 crore in Yes Bank as part of the RBI's reconstruction plan for the crisis-hit lender. The decision was taken at ICICI Bank's board meeting held on Thursday. "The Board... accorded approval for an equity investment of up to Rs 10 billion in equity shares of Yes Bank Limited, comprising up to 1 billion equity shares at a price of Rs 10 per share, under the proposed Scheme of Reconstruction of Yes Bank Limited under the Banking Regulation Act, 1949, subject to regulatory and government approval," ICICI Bank said in a regulatory filing. This investment will result in ICICI Bank Ltd holding in excess of 5 per cent shareholding in Yes Bank, with the final shareholding to be determined based on the final Scheme of Reconstruction and share issuance thereunder, it added. The RBI superseded Yes Bank's board on March 5 and put the lender under a moratorium, restricting withdrawals to Rs 50,000 per account till April 3. Finance Minister Nirmala Sitharaman on Friday said the moratorium will be lifted in three days. On the cost of acquisition of shares in Yes Bank, ICICI Bank said it is for cash consideration of Rs 10 billion wherein it will acquire 1 billion equity shares of face value of Rs 2 at a premium of Rs 8 per share. ICICI Bank also clarified that this is not a related party transaction. Total assets of Yes Bank Ltd stood at Rs 3,46,576 crore as end of September 2019. The bank posted a net loss of Rs 486 crore for the first half ended September of the current fiscal year on a total income of Rs 17,421 crore. Yes Bank will on Saturday (March 14) announce its third quarter results, which was delayed amid the bank's capital raising plans. As per the RBI approved reconstruction plan for Yes Bank, the country's largest lender SBI will pick-up 49 per cent stake in the cash-strapped private sector lender by infusing Rs 7,250 crore. Also, SBI will have to maintain at least 26 per cent shareholding for three years. Briefing reporters after the cabinet meeting here, Sitharaman said the reconstruction scheme keeps at its core the protection of depositors' interest, providing stability to Yes Bank and keeping a stable financial environment and banking system. Stock of ICICI Bank closed at Rs 447.45 on BSE, up 5.28 per cent from the previous close. KPM ABM

New Delhi, Nov 15 () Finance Minister Nirmala Sitharaman on Friday said four real estate companies from three cities, Mumbai, Bengaluru and Hyderabad, have approached to avail Rs 25,000 crore bailout fund.
 More companies are likely to approach the nodal agency for taking benefit of this window from next week, she said.
 Earlier this month, the government approved a Rs 25,000 crore fund to help complete over 1,600 stalled housing projects, including ones that have been declared NPAs or admitted for insolvency proceedings in a bid to boost growth by steering consumption in real estate and associated sectors.
 The Alternative Investment Fund (AIF) comprises of Rs 10,000 crore coming from the government and the remaining being provided by state insurer LIC and the country's largest lender SBI.
 The fund, to be set up as Category-II AIF registered with SEBI, will be managed by SBICAP Ventures Limited.
 The AIF, which was first announced by the Finance Minister on September 14, will act as a 'special window' to provide loans to over 1,600 incomplete affordable and middle-lower income housing projects.
 She further said that she will be holding a meeting with banks next week to assess their lending to the NBFC sector.
 The ministry will seek disaggregated data on how much funds have been given to AAA-rated NBFCs and NFBCs rated below AAA and also seek details from RBI and PSU Banks on funds given to AAA-rated NBFCs, investment-grade NBFCs, she added. DP DP MR
MR

4 real estate cos from three cities requests to avail bailout fund: FM

(Eds: Combining related stories) Mumbai, Mar 5 () In a rare move, capital-starved Yes Bank was on Thursday placed under a moratorium, with the RBI capping deposit withdrawals at Rs 50,000 per account for a month and superseding its board. Yes Bank will not be able to grant or renew any loan or advance, make any investment, incur any liability or agree to disburse any payment. However, it will be able to pay salaries to its over 20,000 employees, the central bank said. The regulatory actions, undertaken by the RBI and the government, came hours after finance ministry sources confirmed that SBI was directed to bail out the troubled lender. For the next month, Yes Bank will led by the RBI-appointed administrator Prashant Kumar, an ex-chief financial officer of SBI. The country's financial sector is already reeling under a spate of setbacks, starting with the high quantum of dud assets at over Rs 10 lakh crore, their slow-paced resolutions despite legal teeth through bankruptcy laws, scandals at non-bank lenders like IL&amp;FS and DHFL, and also fraud at cooperative lender PMC Bank. The last lender to be placed under a similar action was PMC Bank in September last year. While the withdrawal limits have been increased over time to Rs 1 lakh now, many PMC Bank depositors are still in the lurch. There is no provision to handle insolvencies of commercial banks, and the raft of actions come even as the government is working on the FRDI (financial resolution and deposit insurance) Bill. Just like PMC and DHFL, the RBI superseded the board of Yes Bank for a period of 30 days "owing to serious deterioration in the financial position of the bank". The government took the decision of placing the bank under moratorium on an application made by the RBI, a gazette notification signed by Amit Agarwal, joint secretary in the finance ministry, said. The RBI had appointed former deputy governor R Gandhi to the bank's board last year amid the leadership turmoil, caused by the central bank's August 2018 action asking co-founder and chief executive Rana Kapoor to step down by January 2019 on corporate governance concerns. The developments come exactly a year and four days after Ravneet Gill joined the lender, after leaving German bank Deutsche Bank's India operations. Immediately on joining, Gill identified hidden stress of over Rs 10,000 crore, providing for which eroded capital buffers. The bank has been struggling to execute a capital raising plan for the last six months and had been repeatedly assuring all that it sees some hope of funds flowing in. It had also named ace investor Rakesh Jhunjunwala, GMR Group and Citax Holdings as being interested in the bank. Yes Bank's core equity tier-I ratio had slipped to 8.7 per cent as of September. The bank had pushed its December quarter results announcement to March 14, citing hindrances it may pose to the capital raising plan. "The Reserve Bank came to the conclusion that in the absence of a credible revival plan, 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 under section 45 of the Banking Regulation Act, 1949," an RBI statement said late Thursday evening. It said the bank management had indicated that it was in talks with various investors and was also engaged with a few private equity firms for exploring opportunities to infuse capital. "These investors did hold discussions with senior officials of the Reserve Bank but for various reasons eventually did not infuse any capital. "Since a bank and market-led revival is a preferred option over a regulatory restructuring, the Reserve Bank made all efforts to facilitate such a process and gave adequate opportunity to the bank's management to draw up a credible revival plan, which did not materialise," the central bank said. In the meantime, Yes Bank was facing regular outflow of liquidity, the apex bank said, justifying its actions. As part of the moratorium directions, Yes Bank will not be able to grant or renew any loan or advance, make any investment, incur any liability or agree to disburse any payment, the RBI said. However, it will be able to pay salaries to its over 20,000 employees and also rents, it clarified. The actions come hours after reports of the government directing a consortium of largest lender SBI and life insurance behemoth LIC to bail out the bank emerged. If successful, this will be the first major instance in many years where a private sector lender will be bailed out using public money, with the first instance being Global Trust Bank's amalgamation with Oriental Bank of Commerce in 2003, which was followed with IDBI Bank's takeover of United Western Bank in 2010. The news of a bailout packaged had sent the Yes Bank stock soaring. It closed 25.77 per cent up at Rs 36.85 apiece on the BSE. However, brokerages were not enthused, and couple of them pegged the value of each stock at Re 1 if such a bailout were to happen. Terming it as a "quasi sovereign bailout", J P Morgan said, "we believe forced bailout investors will likely want the bank to be acquired at near zero value to account for risks associated with the stress book and likely loss of deposits". Earlier this year, SBI Chairman Rajnish Kumar had said the troubled bank will "not be allowed to fail". He had also suggested that rival Kotak Mahindra Bank is best suited to take over Yes Bank. AA BEN ABMABM

Yes Bank placed under moratorium; RBI supersedes board

Reserve Bank Governor <keyword id="6359111" type="UNKNOWN" weightage="20" keywordseo="Shaktikanta-Das">Shaktikanta Das</keyword> on Saturday advocated the creation of a '<keyword id="1704908" type="COMPANY" weightage="20" keywordseo="Resolution-Corporation">resolution corporation</keyword>' with legislative backing for resolution and revival of stressed financial firms. The government in August 2017 had introduced the Financial Resolution and Deposit Insurance (FRDI) Bill in Parliament which, among other things, proposed setting up of a resolution corporation. However, after a year, the government decided to withdraw the bill as there were concerns raised about the protection of depositors' money if it was passed with the controversial "bail-in" clause, under which a bank's liabilities could be cancelled/modified to shore up its finances. "Going forward, we need the legislative backing to have some kind of a resolution corporation, which has to deal with resolution and revival of stressed financial firms," Governor Das said at the 7th SBI Banking and Economics Conclave. He said the regulator can issue early warning signals and flag the emerging risks. "The regulator will continue to take necessary measures, continue to engage with the management of the bank or NBFCs to identify the vulnerabilities, but there has to be a legally-backed arrangement," he noted. The governor said setting up a resolution corporation was earlier part of the FRDI Bill which the government withdrew because there were certain issues which needed closer examination. He further said the notification issued under Section 227 of the Insolvency and Bankruptcy Code (IBC) has given additional powers to the RBI to deal with non-banking financial companies (NBFCs) and housing finance companies (HFCs). By using those powers, the RBI had appointed an administrator for Dewan Housing Finance (DHFL) and that has been referred to the National Company Law Tribunal (NCLT), he said. DHFL, the third-largest pure-play mortgage player, is the first NBFC/HFC to face the corporate insolvency resolution process. Das said the resolution of DHFL is on stream now. "That is going on fairly well. We review it, we do monitor it from time to time," he added. The Reserve Bank Governor said as far as banks and other financial institutions are concerned, the approach traditionally has been to merge a failed bank with a larger lender. "While that definitely protects the depositors' interest but it also tends to pull down the balance sheet of the larger bank to which the smaller bank or the failed bank is merged," he noted. Giving the example of Yes Bank, Das said initially a market-based resolution was tried out for the lender where investors had shown interest. It was thought as the best way of going ahead with the process wherein a new investor would come in, put money and take it forward but it did not materialise, he said. "We then, without adversely impacting the balance sheet of any participating bank, worked out this arrangement of public private partnerships," the Governor said. Under the bailout plan, Yes Bank had received around Rs 10,000 crore from eight financial institutions, including Rs 6,050 crore from SBI. "The Yes Bank reconstruction scheme forged a unique public private partnership between leading financial entities of India, and it was implemented in a very quick time, which helped the bank's revival, successfully safeguarded the interest of the bank's depositors and ensured financial stability," Das said. With regard to the Punjab and Maharashtra Co-operative Bank, the RBI is engaged with all stakeholders to find out a workable solution as losses are very high, eroding deposits by more than 50 per cent, he added. Das further said the RBI's focus now is to identify the vulnerability from a very incipient stage, and then engage with the management of a bank or financial entity to ensure that the problem does not become larger. "Having said that, I must say that a bigger responsibility lies with the banks and the financial entities themselves," he emphasised. He added that many banks, both in the public and private sectors, have improved their internal risk management systems and procedures, and are able to take pre-emptive action. SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/rbi-governnor-shaktikanta-das-explains-how-to-detect-bad-loans-off-site/articleshow/76906892.cms" style="">As RBI works from home, Governor Das is relying on off-site surveillance to 'smell the distress'</a> <a href="https://www.businessinsider.in/business/news/indian-economy-showing-signs-of-returning-to-normalcy-rbi-governor/articleshow/76905988.cms">Indian economy showing signs of returning to normalcy: RBI Governor</a>

RBI Governor advocates for a legally-backed 'resolution corporation' to deal with stressed financial firms

Mumbai, Jun 22 () The Reserve Bank has asked private sector lender Yes Bank not to pay interest on tier-II bonds due on June 29 as its capital levels are below the mandatory threshold. Interest payments on the bank's 10.25 per cent unsecured non-convertible upper tier-II bonds issued in 2012 is due on June 29 and the city-based lender had sought the RBI nod to honour the same. "The Reserve Bank of India has expressed its inability to accede to the bank's request for payment of interest due as on June 29, 2020, since the bank does not meet the minimum capital requirements currently. Therefore, the bank would be unable to pay interest/coupon on the said upper tier II bonds which is due for payment on June 29, 2020," the bank informed the exchanges on Friday. As per the June 25, 2012 memorandum at the time of issue of the bonds, the interest due will be accumulated and paid later once the bank complies with stipulated regulatory requirements. "....the specific features of the instrument require debt servicing to be linked to the bank meeting regulatory norms on capital adequacy," its managing director and chief executive Prashant Kumar said. Asserting that the bank has adequate liquidity to meet all its obligations, Kumar said the coupon on these bonds is cumulative in nature and any unpaid sum will become payable once the bank meets minimum regulatory capital ratio. The bank's total capital adequacy ratio had stood at 8.5 per cent, including the tier-I ratio at 6.5 per cent as of March 31 this year. The regulatory requirement is to maintain the tier-I ratio above 8.875 per cent. The bank, which had to be bailed out by a SBI-led consortium of lenders in March, is reportedly looking at a Rs 10,000-crore capital raise from new investors at present and already has enabling resolutions to raise up to Rs 15,000 crore. As part of the bailout, SBI and other lenders had infused Rs 10,000 crore into Yes Bank, who's top management and the board was dissolved by the Union government on March 5 as part of a scheme decided by it with the RBI. As part of the same scheme, over Rs 8,400 crore in additional tier-I bonds were written down. The Yes Bank scrip closed 0.89 per cent down at Rs 27.75 apiece on the BSE on Monday as against gains of 0.52 per cent on the benchmark. AA MKJ

RBI bars Yes Bank from paying interest on tier-2 bonds

Mumbai, Apr 30 () The Reserve Bank of India on Thursday extended regulatory benefits to all banks including those deploying their own resources to extend liquidity support to the mutual funds under the Special Liquidity Facility for Mutual Funds (SLF-MF) scheme. Earlier in the week, the Reserve Bank had announced Rs 50,000-crore SLF-MF scheme to bailout the mutual funds facing redemption pressure. The scheme was announced in the backdrop of Franklin Templeton Mutual Fund deciding to shut several schemes. "Based on requests received from banks, it has now been decided that the regulatory benefits announced under the SLF-MF scheme will be extended to all banks, irrespective of whether they avail funding from the Reserve Bank or deploy their own resources under the ...scheme," Reserve Bank of India said in a release. The RBI further said banks meeting the liquidity requirements of MFs by extending loans and undertaking outright purchase of and/or repos against the collateral of investment grade corporate bonds, commercial paper (CPs), debentures and certificates of deposit (CDs) held by MFs, will be eligible to claim all the regulatory benefits available under the scheme. The banks claiming the regulatory benefits would be required to submit a weekly statement containing consolidated information on entity-wise and instrument-wise loans and advances extended or investment made to eligible entities to Financial Markets Operations Department and to Department of Supervision on every Monday till the closure of the scheme, the RBI said. The Rs 50,000 crore liquidity window came days after, the Franklin Templeton Mutual Fund, which has been operating in India for 25 years, decided to shut down Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunities Fund. Last time, RBI had opened a special borrowing window of Rs 25,000 crore for banks to help meet the cash requirements of mutual funds in July 2013. Post the collapse of Lehman Brothers, RBI, in October, 2008, had provided a similar additional liquidity support exclusively for mutual fund industry. The central bank also stressed it remains vigilant and will take whatever steps are necessary to mitigate the economic impact of COVID-19 and preserve financial stability. Under the Special Liquidity Facility for Mutual Funds (SLF-MF), the RBI will conduct repo operations of 90 days tenor at the fixed repo rate. NKD CS DRRDRR

You Searched For "rbi bailout" and got 12 results

Yes Bank gets Rs 250 crore from IDFC First Bank

PTI

SBI statement on proposed Yes Bank bailout is far from reassuring

Sriram Iyer

Yes Bank shares shoot up by 30% after SBI decides to buy stake

PTI

Covid-19: Ficci seeks bailout package for aviation industry

PTI

Moratorium on Yes Bank to go soon; govt approves bailout plan

PTI

ICICI Bank to infuse Rs 1,000 cr in Yes Bank as part of bailout plan

BI India Bureau

ICICI Bank to infuse Rs 1,000 cr in Yes Bank as part of bailout plan

PTI

4 real estate cos from three cities requests to avail bailout fund: FM

PTI

Yes Bank placed under moratorium; RBI supersedes board

PTI

RBI Governor advocates for a legally-backed 'resolution corporation' to deal with stressed financial firms

PTI

RBI bars Yes Bank from paying interest on tier-2 bonds

PTI

RBI extends regulatory benefits under SLF-MF scheme to all banks

PTI

Popular Keywords

Buying Guides