Yes Bank raises Rs 7,000 crore through certificate of deposits in a week

Yes Bank's new eight-member board took charge on March 26.

By Ankur Mishra

The newly-reconstructed private lender Yes Bank has been able to raise around Rs 7,000 crore in total through money market instrument certificate of deposits (CDs) within past one week, sources in the know told FE. "Yes Bank has raised Rs 3,500 crore on Monday, and similar amount was raised on last Friday through CDs," the source said. Yes Bank board had approved fundraising of up to Rs 15,000 crore on March 26. The shares of Yes Bank closed at Rs 23.95 on Bombay Stock Exchange (BSE), up 6.68% from previous day closing price, on account of fundraising news by the private lender. State Bank of India (SBI) and seven other lenders already infused Rs 10,000 crore in Yes Bank via equity infusion. SBI alone had infused Rs 6,050 crore to pick up a 48.2% equity stake in the bank. RBI governor Shaktikanta Das said on March 16 that the regulator was ready to provide liquidity support to the private lender when needed.

Yes Bank's new eight-member board took charge on March 26. Former Punjab National Bank chairman Sunil Mehta is non-executive chairman and Prashant Kumar, who was the private lender's administrator during reconstruction, assumed charge as MD and CEO of the bank. RBI had appointed former deputy governor R Gandhi and associate professor of SP Jain Institute of Management and Research, Ananth Narayan, as additional directors on the board. Mahesh Krishnamurthy and Atul Bheda were also appointed by the government as non-executive directors. SBI had nominated its deputy MDs J Swaminathan and Partha Pratim Sengupta on the board.

The new board will also take a decision on changes in senior management positions in the coming days. RBI had earlier notified in the reconstruction plan that the bank's employees would continue to work with the same remuneration and on same conditions for at least a year. However, the newly constructed board has the freedom to discontinue services of senior management.

There was a sharp reduction in bank's total deposits from Rs 2.09 lakh crore in September 2019 to Rs 1.37 lakh crore till March 5. The cost to income ratio in the December quarter stood at 100.4%, up from 44% a year ago. The bank is now looking to improve credit growth and wants to focus more on the retail segment. The private lender is also banking on recoveries of Rs 8,500-10,000 crore in the current fiscal year.