Yes Bank begins the process of exit from the reconstruction scheme
Yes Bank On Wednesday it said it had begun the process of creating a new board as it spun out of the reconstruction plan designed to protect the bank in 2020. The proposal for constitution of a new board will be placed before the shareholders of the bank on its 18th day. Annual General Meeting (AGM) on 15th July
The process was initiated on the recommendation of state Bank of India ,State Bank Of India), the largest shareholder in Yes Bank. SBI has proposed that MD and CEO Prashant Kumar will continue in his position for the next three years, along with the names of eight new appointments to the board.
Yes Bank Chairman Sunil Mehta said that by initiating the process of constitution of an alternate board, Yes Bank has achieved an important milestone of coming out of the reconstruction plan. “On behalf of the Board, I assure all our stakeholders that the Bank has built a strong ethos of integrity, trust and transparency, which will not be compromised. The bank is now all set to achieve its long-term growth trajectory towards the formation of an alternate board,” said Mehta.
Apart from Mehta and chief executive Prashant Kumar, the board of Yes Bank includes independent directors Mahesh Krishnamurthy and Atul Bheda, Reserve Bank of India (RBI)reserve Bank of India) appointed directors R Gandhi and Ananth Narayan, and SBI nominee directors VS Radhakrishnan and Ravindra Pandey. With the formation of the new board, Mehta, Krishnamurthy and Bheda will step down. Gandhi and Narayan’s terms are valid till March 23, 2023 or till further orders of the regulator.
Posting a full-year profit of Rs 1066 crore after two years of losses in FY 2012 and FY 2011, Yes Bank bounced back into the black in FY12. During the year, the loan book of the lender grew by 9%, with a gross disbursement of Rs 70,000 crore. The deposit book grew 88% to Rs 1.97 trillion between FY20 and FY22.
In March 2020, the RBI superseded the board of Yes Bank over fears that the bank’s capital level would fall below regulatory requirements. SBI and other major financial institutions had infused capital into the bank as part of their reconstruction plan, on condition that they close at least 25% of their investments for three years.