Yes Bank Repays Rs 35,000 Crore To RBI Under Special Liquidity Facility
The private lender had availed Rs 50,000 crore from the central bank under the window.
Yes Bank Ltd. said it has repaid Rs 35,000 crore out of the Rs 50,000 crore that it had availed from the Reserve Bank of India under the special liquidity facility.
While announcing its earnings for the quarter ended June, it had said that it had paid Rs 25,000 crore to the RBI in July. “I’m pleased to report that the bank has, as of date, repaid Rs 35,000 crore of SLF and the balance will be repaid within the timelines set by RBI,” Sunil Mehta, non-executive chairman of Yes Bank, told shareholders in a letter published in the bank’s FY20 annual report.
A Rs 60,000 crore special liquidity window was first offered to Yes Bank in March as part of the RBI’s rescue effort. A second such liquidity window worth Rs 50,000 crore was offered to Yes Bank in June. The windows were offered to the bank to repay depositors who were withdrawing funds from their accounts.
The rescue effort came after Yes Bank’s financial position worsened significantly in March, when the RBI superseded the its board and replaced its management. In the same month, a clutch of domestic lenders led by State Bank of India invested Rs 10,000 crore in the beleaguered private lender to rescue it.
Later in July, the bank raised Rs 15,000 crore through a follow-on public offer which helped improve its financial position and meet the minimum capital adequacy ratio. After the fund raise, the bank’s Tier 1 capital rose to 13.5% from 8.5% earlier. Its total capital adequacy ratio stands at 20%.
“The significantly improved solvency ratio strengthens the bank’s resilience to potential asset quality risks resulting from the impact of the economic slowdown and Covid-19 related disruptions on India’s economy,” Mehta was quoted as saying in the letter.
Investors in Yes Bank’s FPO included SBI, Life Insurance Corporation of India, SBI Life Insurance Co., Punjab National Bank, Union Bank of India, Edelweiss, U.S.-based investor Tilden Park and HDFC Standard Life Insurance Co., among others.
On Aug. 3, Moody’s Investor Service raised Yes Bank’s rating by a notch to B3. The lender’s deposit base rose 11.4% quarter-on-quarter to Rs 1.17 lakh crore in the quarter ended June.