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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

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

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. 
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 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>. 
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 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

(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

<ul class="summary-list"><li><keyword id="11930691" type="UNKNOWN" weightage="60" keywordseo="sam-bankman-fried" source="Orion">Sam Bankman-Fried</keyword> is pumping big money into an unregulated industry that lacks a central savior.</li><li>The crypto billionaire has said he feels obligated to "stem contagion" and make bad deals "if that's what it takes to sort of stabilize things."</li></ul>Sam Bankman-Fried is spending big money to save failing <keyword id="11892695" type="UNKNOWN" weightage="60" keywordseo="cryptocurrency" source="Orion">cryptocurrency</keyword> ventures, pumping liquidity into an unregulated industry that lacks a central savior.He told NPR last month that he <a href="https://www.npr.org/2022/06/19/1105853170/crypto-billionaire-says-fed-is-driving-current-downturn?t=1655714493949&amp;t=1655716233544">feels obligated to "stem contagion."</a> And speaking to Forbes last week, Bankman-Fried said FTX, the cryptocurrency exchange he founded and helms, is "<a href="https://www.forbes.com/sites/stevenehrlich/2022/06/28/bankman-fried-some-crypto-exchanges-already-secretly-insolvent/?sh=165c86847f7f">willing to do a somewhat bad deal here, if that's what it takes to sort of stabilize things</a>."Those bad deals include extending lifelines to victims of a market rout that has yet to settle as risk assets respond to tightening from the Federal Reserve. Last month, he offered up to $500 million in cash and cryptocurrencies to Voyager Digital and a $250 million line of credit to BlockFi.The rescues prompted declarations that Bankman-Fried was crypto's lender of last resort. Anthony Scaramucci even anointed him as <a href="https://www.bloomberg.com/news/articles/2022-06-21/bankman-fried-doles-out-credit-lines-to-stem-crypto-contagion?utm_content=crypto&amp;utm_source=twitter&amp;utm_campaign=socialflow-organic&amp;utm_medium=social#xj4y7vzkg">"the new John Pierpont Morgan,"</a> whose bailouts of the US financial system more than 100 years ago helped give rise to the Federal Reserve.But it wasn't the first time Bankman-Fried came to the rescue. Last August, FTX extended Japanese crypto exchange Liquid Group a $120 million loan after it suffered a $100 million hack.In essence, Bankman-Fried has emerged as central banker-like figure for the crypto market at a time when <keyword id="12068706" type="UNKNOWN" weightage="60" keywordseo="digital-assets" source="Orion">digital assets</keyword> are in freefall. And he may not be alone in the future, analysts say, as continued volatility within the crypto market gives other billionaires an opportunity to jump in. "Yes, Sam was just the first," said Chris Brendler, managing director and senior research analyst at D.A. Davidson. He added that the climate for cryptos mirrors that of the 2008 financial crisis, and that "larger exchanges will be prioritized to limit systemic risk."Meanwhile, Binance founder and CEO Changpeng Zhao has also played the role of crypto savior. In April, Binance led a $150 million fundraising round for Sky Mavis, the parent of play-to-earn game Axie Infinity, which suffered a $625 million hack."We strongly believe Sky Mavis will bring a lot of value and growth for the larger industry and we believe it's necessary to support them as they work hard to resolve the recent incident," Zhao said at the time. More recently, he opined last month on crypto bailouts broadly. In a <a href="https://www.binance.com/en/blog/from-cz/a-note-on-bailouts-and-crypto-leverage-421499824684904048">blog post on June 23</a>, Zhao wrote that given Binance's healthy cash reserves, "We also have a responsibility to help industry players survive and hopefully thrive." To be sure, such rescues may not be totally altruistic. As the head of crypto exchanges, Bankman-Fried and Zhao have an interest in preventing a sector collapse.And Bankman-Fried also may not want to miss a good bargain. On Friday, BlockFi announced a deal for a $400 million credit facility from FTX US, which has an option to buy for up to $240 million."It looks like SBF is playing chess while the rest of the cryptoverse is playing checkers and just waiting for the latest crash to bottom out," said OANDA analyst Edward Moya, before the deal was announced. "A lot of crypto companies are close to insolvency and SBF is is positioning himself to try to take advantage of some very attractive discounts."A takeover of BlockFi would follow an earlier precedent. After extending the lifeline to Liquid, FTX bought the company in February. And more deals are likely to come."[There's] no doubt others will come in to swoop up assets as the situation evolves and not limited to crypto players," said Martha Reyes, head of research at BEQUANT.

Sam Bankman-Fried might be crypto's central banker as bailouts pile up, but others could step in as 'Sam was just the first'

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 () 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

<ul><li><keyword id="8883506" type="UNKNOWN" weightage="20" keywordseo="yes-bank-founder-rana-kapoor">Yes Bank founder Rana Kapoor</keyword> was arrested by the Enforcement Directorate (ED) early today, March 8.</li><li>He has been arrested under the provision of the <keyword id="6355007" type="UNKNOWN" weightage="20" keywordseo="Prevention-of-Money-Laundering-Act">Prevention of Money Laundering Act</keyword> (PMLA).</li><li>Authorities claim he was not cooperating with the probe.</li></ul> The Enforcement Directorate arrested Yes Bank founder Rana Kapoor under money laundering charges here in the early hours of Sunday, officials said. The banker was held under the provision of the Prevention of Money Laundering Act (PMLA) around 3 am as he was allegedly not cooperating in the probe, they said. Kapoor's arrest at the ED office in Ballard Estate followed over 20 hours of questioning by the central agency after it raided his residence on Friday night. The arrest comes after charges of alleged financial irregularities and mismanagement in the operations of the private bank surfaced and the RBI and Union government initiated action to control its affairs. Officials said Kapoor, 62, will be produced before a local court during the day to obtain custody. The investigating officer of the case had recorded Kapoor's statement under the PMLA when he was first interrogated on Friday night at his upscale residence in 'Samudra Mahal' complex in Worli area here. He was brought to the ED office on Saturday noon for a fresh round of questioning. On Saturday, the agency widened its probe in the case as the premises of Kapoor's three daughters in Delhi and Mumbai were searched to gather more information and evidence. According to officials, Kapoor's wife Bindu and daughters -- Rakhee Kapoor Tandon, Roshni Kapoor and Radha Kapoor -- are allegedly linked to some companies to which the suspected "proceeds of crime" have been traced. The case against Kapoor is linked to the scam-hit DHFL as the loans lent by the bank to the company allegedly turned NPAs, they said. A Rs 600 crore worth loan extended by the DHFL to an entity is also at the centre of the ED probe, officials said. The central agency is also probing Kapoor's role in connection with the disbursal of loans to some corporate entities and the subsequent alleged kickbacks reportedly received in his wife's accounts. Other alleged irregularities are also under the agency's scanner including the one related to the alleged PF fraud in the Uttar Pradesh power corporation, they added. The CBI has recently taken over investigation into the Rs 2,267-crore Employees' Provident Fund fraud in Uttar Pradesh, where hard-earned savings of power sector employees were invested in Dewan Housing Finance Corporation (DHFL). The ED action came after the Reserve Bank of India (RBI) on Thursday imposed a moratorium on the capital-starved Yes Bank, capping withdrawals at Rs 50,000 per account, and superseded the board of the private sector lender with immediate effect. 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. As per the RBI's draft reconstruction scheme, State Bank of India will pick up 49 per cent stake in the crisis-ridden Yes Bank under a government-approved bailout plan. PTI NES AD 03080721 NNNN

Yes Bank founder Rana Kapoor arrested by ED on charges of money laundering

<ul class="summary-list"><li>Regulators have shut Silicon Valley Bank and taken control of its deposits.</li><li>Shares crashed 86% over the two days before SVB suspended trading Friday.</li></ul>A little-known California bank has become the biggest story in markets.The Federal Deposit Insurance Corporation (FDIC) is taking control of <a href="https://markets.businessinsider.com/news/stocks/silicon-valley-bank-failure-fdic-wall-street-regulator-finance-investing-2023-3?_gl=1*1lxxt8k*_ga*MTgxNTI4ODA2Ni4xNjM0MDMzNTYz*_ga_E21CV80ZCZ*MTY3NzE0NTc0OC4zMjguMC4xNjc3MTQ1NzQ4LjAuMC4w">SVB Financial</a> after its stock-price crash dragged on the biggest names in US banking, including <a href="https://markets.businessinsider.com/stocks/jpm-stock">JPMorgan</a> and <a href="https://markets.businessinsider.com/stocks/bac-stock">Bank of America</a>.Here's everything you need to know about what's happening.<h3>What happened?</h3>SVB is a Santa Clara-based bank that lends money to and takes deposits from Silicon Valley tech startups. It provided funding to 44% of all venture capital-backed tech and healthcare companies that publicly listed on a stock exchange last year, according to its <a href="https://www.svb.com/venture-funded" target="_blank" rel="noopener">website</a>.SVB's shares fell 86% between Thursday's opening bell and Friday before the company announced it would halt trading.Regulators have now shut <a href="https://markets.businessinsider.com/stocks/sivb-stock?utm_medium=ingest&amp;utm_source=markets">SVB Financial Group</a> and have taken control of the bank's deposits. <h3>Why did SVB's stock price crash?</h3>There are two reasons – both tied to the Federal Reserve's aggressive interest-rate hikes as it bids to crush soaring inflation in the US.The Fed's tightening campaign weighed on SVB's bond holdings, and it disclosed a $1.8 billion loss Thursday after completing a $21 billion fire sale of its fixed-income portfolio. The company tried and failed to raise $2.3 billion through stock sales to cover those losses.In addition, startups find it more difficult to access funding with borrowings turning costlier – and that's fueled a high level of deposit outflows from SVB, analysts say. This sparked <a href="https://www.businessinsider.com/svb-silicon-valley-bank-startups-worry-run-pull-accounts-2023-3?r=US&amp;IR=T">fears of a bank run,</a> prompting several of the SVB's clients to limit their exposure to the institution.SVB's "unique niche in the tech world is a real boon when that business is booming, but a problem when it's not," Interactive Brokers chief strategist Steve Sosnick said.<h3>How is it affecting other bank stocks?</h3>Crypto-friendly bank <a href="https://markets.businessinsider.com/stocks/si-stock">Silvergate Capital</a> announced Thursday it would shut down – and the crisis at two financial institutions ignited fears of contagion effects across the entire sector, fueling a sharp selloff across banking stocks.Wall Street's four biggest banks – JPMorgan, Bank of America, <a href="https://markets.businessinsider.com/stocks/wfc-stock">Wells Fargo</a>, and <a href="https://markets.businessinsider.com/stocks/ms-stock">Morgan Stanley</a> – shed $55 billion in combined market value Thursday with investors rattled by the implosion of SVB and Silvergate, according to data from Refinitiv.The <a href="https://markets.businessinsider.com/etfs/invesco-kbw-bank-etf-us46138e6288">KBW Bank Index</a> – which tracks the price of the US's leading publicly-traded banks – plunged 7.7% Thursday for its worst day in almost three years.On Friday, bank stocks offered a mixed picture. JPMorgan's stock price recovered some, while First Republic Bank saw its stock drop 20%. <h3>Are investors worried?</h3>Yes. Some of Wall Street's biggest names have raised the alarm as fears grow that SVB's turmoil will spread to the wider financial system."<a href="https://markets.businessinsider.com/news/stocks/big-short-investor-michael-burry-silicon-valley-bank-collapse-enron-2023-3">It is possible today we found our Enron</a>," 'Big Short' investor Michael Burry said Thursday in a <a href="https://twitter.com/BurryArchive/status/1633988433961177088" target="_blank" rel="noopener">now-deleted Tweet</a>, referencing the scandal-hit energy firm whose collapse came to symbolize the early-2000s stock-market crash.Top economist <a href="https://twitter.com/elerianm/status/1634105811344535553" target="_blank" rel="noopener">Mohamed El-Erian</a> and "<a href="https://twitter.com/scottmelker/status/1634006239800688643" target="_blank" rel="noopener">Wolf of All Streets</a>" trader Scott Melker are also fretting about the wider impact of what's happened.<h3>What happens next?</h3>On Friday, the <a href="https://markets.businessinsider.com/news/stocks/silicon-valley-bank-failure-fdic-wall-street-regulator-finance-investing-2023-3">FDIC shut Silicon Valley Bank</a>. "To protect insured depositors, the FDIC created the Deposit Insurance National Bank of Santa Clara (DINB). At the time of closing, the FDIC as receiver immediately transferred to the DINB all insured deposits of Silicon Valley Bank," the regulator said in a statement. Billionaire investor Bill Ackman had previously called for the US government to bail out the company because of its important role in the world of venture capital."The failure of SVB Financial could destroy an important long-term driver of the economy as VC-backed companies rely on SVB for loans and holding their operating cash," he said on <a href="https://twitter.com/BillAckman/status/1634028534107602944" target="_blank" rel="noopener">Twitter</a> Thursday evening. "If private capital can't provide a solution, a highly dilutive government preferred bailout should be considered," Ackman added.

Silicon Valley Bank crisis: Everything you need to know about SVB Financial as regulators shut down the bank

Mumbai, Jun 23 () Domestic rating agency Icra on Tuesday downgraded the rating on certain bonds of Yes Bank, days after RBI restrained the lender from making repayments to bondholders on account of capital being below the mandated levels. The rating on six Basel-II compliant upper tier II bonds totalling up to Rs 32,611 crore have been downgraded to 'D', according to a statement. RBI had refused to accede to a bank's request to pay the interest on the bonds issued in 2012 due on June 29 because of the low capital levels. The bank, which is preparing for raising capital at present, had asserted that it has sufficient liquidity to meet all requirements. "The timely servicing of the upcoming coupon, which is cumulative in nature remains constrained and the same is likely to be paid only when the bank achieves a CRAR of 9.0 per cent," Icra said. The latest rating also take into account the reported net loss of Rs 16,418 crore in FY20 and the CRAR of 8.50 per cent as on March 31, despite the sizeable capital infusion by new shareholders and the write-down of the Additional Tier I (AT-I) bonds in Q4 FY20, it added. CRAR is Capital to Risk Weighted Assets Ratio (CRAR). The rating agency also acknowledged that Yes Bank is at "advanced stages" of raising the capital but the same is unlikely to be concluded before June 29. Further, the rating also factors in the likelihood of high credit costs owing to the weak operating environment coupled with the high overdue advances (Special Mention Accounts) that stood at 7 per cent of the standard advances as of March. The support from SBI and other lenders, who poured in Rs 10,000 crore for the bailout, is a key credit strength while ability to raise deposits, large capital requirements and likely pressures on operating profits are among the challenges, as per Icra. Yes Bank shares closed 0.54 per cent down at Rs 27.60 apiece on the BSE on Tuesday as against gains of 1.49 per cent on the benchmark. AA RAM

Icra downgrades rating on certain Yes Bank bonds

New Delhi, Mar 13 () Uday Kotak-led Kotak Mahindra Bank on Friday said it will infuse equity capital of Rs 500 crore into Yes Bank under the RBI's bailout plan for the crisis-hit lender. "...the Bank has issued a equity commitment letter to invest Rs 500 crore (the 'equity commitment') in Yes Bank Limited for subscription of 50 crore equity shares of Yes Bank at a price of Rs 10 per equity share," Kotak Mahindra Bank said in a regulatory filing. The commitment is pursuant to the scheme of reconstruction of Yes Bank proposed by the Reserve Bank of India (RBI) under Section 45 of the Banking Regulation Act, 1949, and is subject to regulatory approvals and other conditions, it added. 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 bank by infusing Rs 7,250 crore. SBI will have to maintain at least 26 per cent shareholding for three years. ICICI Bank and Axis Bank too said they will invest Rs 1,000 crore and Rs 600 crore, respectively, while largest mortgage lender HDFC Ltd will infuse Rs 1,000 crore. All the investment plans outlined by these lenders on Friday will be for cash consideration. Meanwhile, Finance Minister Nirmala Sitharaman on Friday 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. 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 due to its precarious financial condition and inability to raise much-needed capital. Sitharaman said the moratorium on the bank will be lifted within three days of notification of the reconstruction scheme. KPM ABM

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