SBI gets board approval to invest in Yes Bank, hours after RBI imposes moratorium on capital-starved lender

The State Bank of India (SBI) has been authorised by its board members (an "in-principle" approval, it is being said) to invest in the capital-starved Yes Bank, hours after the Reserve Bank of India (RBI) on Thursday imposed a moratorium on the troubled private lender and the withdrawal limit for depositors at Rs 50,000.

On Thursday, the central board of SBI discussed the matter at a meeting and later informed the exchanges. "The matter in regard to Yes Bank was discussed at the meeting of the central board of bank on Thursday and an in-principle approval has been given by the board to explore investment opportunity in the bank," the SBI board informed the bourses late in the evening.

The government has reportedly asked SBI and life insurance behemoth LIC to collectively pick up a 49% stake in Yes Bank.

The SBI, however, denied that any negotiations took place to acquire equity in Yes Bank while responding to queries from the bourses, an IANS report said. Replying to a question on negotiations held with Yes Bank and from when SBI stated that no such negotiations took place.

The SBI is quoted as saying, "However, the matter in regard to Yes Bank was discussed at the meeting of the Central Board of the Bank on March 5 and an in-principle has been given by the Board to explore investment opportunity in the Bank".

SBI further stated that it was not aware of any information not disclosed to the exchanges that may have led to the movement in trading.

The Reserve Bank on Thursday imposed a moratorium on troubled private lender Yes Bank and also superseded the Board of Directors for a period of 30 days owing to a serious deterioration in the financial position of the bank.

In a notification, the government said depositors will not be allowed to withdraw more than Rs 50,000. The restrictions in the withdrawal of deposits will be subject to certain conditions and the RBI may, by a general or special order, permit the bank to allow withdrawal of over Rs 50,000 in the following unforeseen circumstances:

The moratorium is placed from 6 pm, March 5 till April 3, 2020.