Yes Bank Press Conference Updates: Nothing Wrong With Yes Bank’s Books, Says SBI’s Rajnish Kumar
Catch all updates from the Yes Bank press conference here.
KEY HIGHLIGHTS
Watch: Yes Bank Press Conference
SBI's Nominees For Yes Bank Board
SBI is recommending Partha Pratim Sengupta and J Swaminathan as board members for Yes Bank, Kumar said.
Nothing Wrong With Yes Bank's Books: Rajnish Kumar
SBI Chairman Rajnish Kumar said that there was a lot of due diligence done on the books of Yes Bank. He said that based on their due diligence, they found nothing wrong in the Mumbai-based lender’s books.
Whatever has been declared by the bank is a true representation of the bank's financial position, Rajnish Kumar said.
There is no need for a forensic audit, Yes Bank administrator Prashant Kumar said.
Yes Bank's Business Strategy Ahead
Yes Bank administrator Prashant Kumar said that the first focus of Yes Bank now would be building a deposit franchise. "I am not saying we'll become a retail bank. But there will be a shift of focus from corporate to retail."
Kumar said that currently, corporate accounts make 60 percent of the bank's book and retail makes 40 percent. Yes Bank would like it to be the other way around, he said.
No Plan To Change The Yes Bank Brand
Yes Bank administrator Prashant Kumar said that there are no talks of changing the brand name of the lender. “The branding is quite strong.”
Sufficient Funding Lines Available
Yes Bank administrator Prashant Kumar said that there are enough funding lines available if the bank needs more capital. SBI Chairman Rajnish Kumar also reiterated the same. “I am present here to give the assurance that this bank will get all the liquidity it needs,” he said.
'Need To Move Away From Bulk Deposits'
Prashant Kumar said that the bank will now have to build a granular deposit franchise and move away from bulk deposits. "It will need time, but our teams on the ground are ready and working on it."
No Comments On AT-1 Bonds Written Off
Yes Bank administrator Prashant Kumar said that they would not like to comment on the bank’s decisions to write off its AT-1 bonds because the matter is sub judice. “Whatever has been done is in accordance with the agreement between the bondholders and Yes Bank,” Kumar said.
Two-Step Capital Raising Process: SBI's Rajnish Kumar
SBI Chairman Rajnish Kumar said that the investors decided that capital raising could be a two-stage process so that the bank can come out of moratorium as soon as possible.
The current Rs 10,000 crore worth funds would lead to meeting all capital ratios. So we can always do another round of fund raise a little later, Rajnish Kumar said.
Confident There Won't Be Outflows: Prashant Kumar
Yes Bank administrator Prashant Kumar said that the bank did their internal analysis and are confident that when the moratorium ends tomorrow, the bank won't see a flurry of outflows.
“What we saw was that only 1/3rd of the customers withdrew funds to the full extent of Rs 50,000. So that itself is a huge comfort. The feedback we are getting from the ground, they say that they don't have any apprehensions or they don't feel the need to shift to any other bank. That is a huge comfort,” Kumar said. “Last four days the bank saw higher inflows than outflows.”
'No Need For External Liquidity'
Yes Bank will not need external liquidity after the reconstruction scheme. And if it is needed then the supply is there, Yes Bank administrator Prashant Kumar said.
Kumar said complete normalcy will resume from Wednesday 6 P.M. “Our branches and employees are ready and we are ensuring that the relationship managers are meeting with customers and ensuring that their funds are safe,” Kumar said.
Yes Bank Administrator Prashant Kumar Lists Out Details Of Reconstruction Scheme
The reconstruction scheme is basically about the constitution of the board, equity participation by SBI and other banks, Kumar said. The entire stressed book has been taken into account in December quarter results, he said.
Even accounts that had slipped as on March 12 were recognised as non-performing assets.
Prashant Kumar added that the assurance from RBI Governor that deposits will be safe is a positive.
Kumar said it is historical that such an incident was addressed within 13 days. If the situation had not been handled the way it has been done, this could have turned into a contagion impact, he said.
Yes Bank Press Conference Shortly
Yes Bank Ltd. will hold a press conference today, it’s first since the government put it under a moratorium and the Reserve Bank of India formulated a rescue plan for the lender led by State Bank of India and other private banks.
Yes Bank administrator Prashant Kumar, and heads of other lenders including SBI’s Rajnish Kumar, IDFC First’s V. Vaidyanathan and Federal Bank’s Ashutosh Khajuria will be present.
Follow live updates here:
Yes Bank: The Story So Far...
The deteriorating financial position of private lender Yes Bank Ltd. forced the government of India to place it under a moratorium on the advice of the Reserve Bank of India.
Withdrawal limits were capped at Rs 50,000 per customer while the central bank superseded its board.
Soon after, the RBI had released a draft reconstruction scheme which involved SBI holding up to 49 percent stake in Yes Bank. SBI would have to maintain a minimum shareholding of 26 percent in Yes Bank for three years. Others investing in the bank will be required to maintain 75 percent of their shareholding for the same period.
The following week saw a number of private lenders joining SBI to rescue Yes Bank. Axis Bank Ltd., ICICI Bank Ltd., Kotak Mahindra Bank Ltd., Bandhan Bank Ltd., Federal Bank Ltd. and Housing Development Finance Corporation Ltd. all approved investments in Yes Bank ranging between Rs 300 crore to Rs 1,000 crore.
Meanwhile, Yes Bank also reported its largest-ever quarterly loss in October-December with a surge in bad loans. The increased provisions needed to cover for the loans depleted the bank's capital. During the period, the lender also witnessed a sharp outflow of deposits.
RBI Governor Shaktikanta Das, yesterday, said that a "credible and sustainable" plan was put into place for Yes Bank's rescue. He said that the RBI will step in with any additional liquidity for the lender if the need arises.
The flurry of investments also meant that rating agency Moody's Investors Service upgraded Yes Bank's rating by a notch as the rescue plan would boost its core capital.
Das also said that the moratorium on Yes Bank would be lifted by Wednesday 6 P.M. The lender said it will resume full banking services from the day after.