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Following the moratorium, the RBI had superseded the board of Yes Bank and placed it under an administrator, Prashant Kumar, former deputy managing director and CFO of SBI.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