In the first meeting after its constitution, the Yes Bank board has approved fundraising of Rs 15,000 crore through the issuance of securities, the bank said in an exchange filing on Thursday. The bank has specified it will raise an additional Rs 5,000 crore over and above the approval of shareholders and the board to raise Rs 10,000 crore on January 10 and February 7.
RBI had appointed former deputy governor R Gandhi and associate professor of SP Jain Institute of Management and Research Ananth Narayan as additional directors in the bank’s board. Mahesh Krishnamurthy and Atul Bheda were also appointed by the government as non-executive director in the board of private lender. SBI had nominated its deputy managing directors J Swaminathan and Partha Pratim Sengupta to the Yes Bank 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.
According to sources, Yes Bank will focus on bringing down cost of deposits and may consider reducing savings rate to below 6%. There was a sharp reduction in the bank’s total deposits from Rs 2.09 lakh crore in September 2019 to Rs 1.37 lakh crore till March 5, 2020. 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 next fiscal.
