Yes Bank’s new team has been trying to raise capital for a long time, but has not been too successful. The bank has now managed to get two resolutions passed at an extraordinary general meeting. One resolution gives approval to raise the authorised share capital of the bank from Rs 800 crore to Rs 1,100 crore, and the other permits the bank to raise up to Rs 10,000 crore in fund infusion to strengthen its capital, reported Livemint.
The Reserve Bank of India has been keeping a very close watch on Yes Bank ever since the founder and the erstwhile CEO of the bank, Rana Kapoor, was asked to step down and the day-to-day management was handed over to a professional team.
Led by Anshu Jain, global investment bank Cantor Fitzgerald was appointed with a mandate to raise $2 billion dollars for the bank. Cantor Fitzgerald and other domestic entities will be responsible for bringing in funds. IDFC Securities and Ambit Capital are the two merchant bankers to be included in this task.
There are many RBI guidelines for banking institutions in India. The promoters cannot hold more than 15% equity. There has been the case of Uday Kotak of Kotak Mahindra Bank still trying to make peace with RBI to accept a drawn-out schedule to reduce his holding in the bank. RBI has just agreed to his plan. Yes Bank has already rejected a proposal from Erwin Singh Braich for making an investment of $1.2 billion in the bank.