The purchase was approved by SBI, a public sector bank. A lock-in period of 3 years has been fixed for Yes Bank shares. As it ends on March 06, SBI is said to be planning to sell Yes Bank stake gradually.
Yes Bank was once the 5th largest bank with over 1,000 branches across the country. The financial management of this bank was in disarray due to corruption and fraud at the top level of this bank. Rana Kapoor, the founder of Yes Bank, knowingly drained people’s savings and investment money from companies that were on the verge of bankruptcy. In return, hundreds of crores of money came to the banks he ran through benami. The matter came to light when the company faltered with weekly loans. The government then intervened and attempted to restructure Yes Bank. In other words, SBI, a private bank, started functioning with the support of the government bank, SBI.
SBI then acquired 49% stake in Yes Bank at Rs 10 per share. Yes Bank has now recovered from bankruptcy. Its shares are trading at Rs.18. SBI’s investment has grown by 80%. In this case, for those who held more than 100 shares in Yes Bank during 2020, a lock-in period of 3 years was fixed to sell the shares. It ends on March 6, 2023.
After the lock-in period, SBI has decided to gradually reduce its stake in Yes Bank. I don’t want to hold Yes Bank shares forever. As a result, Yes Bank shares fell by 3% today. SBI is the single largest shareholder of Yes Bank as on December 31.