Kotak Mahindra Bank to invest Rs 500 cr in Yes Bank

New Delhi, Mar 13 () Uday Kotak-led Kotak Mahindra Bank on Friday said it will infuse equity capital of Rs 500 crore into Yes Bank under the RBI's bailout plan for the crisis-hit lender.

"...the Bank has issued a equity commitment letter to invest Rs 500 crore (the 'equity commitment') in Yes Bank Limited for subscription of 50 crore equity shares of Yes Bank at a price of Rs 10 per equity share," Kotak Mahindra Bank said in a regulatory filing.

The commitment is pursuant to the scheme of reconstruction of Yes Bank proposed by the Reserve Bank of India (RBI) under Section 45 of the Banking Regulation Act, 1949, and is subject to regulatory approvals and other conditions, it added.

As per the RBI-approved reconstruction plan for Yes Bank, the country's largest lender SBI will pick up 49 per cent stake in the cash-strapped private sector bank by infusing Rs 7,250 crore.

SBI will have to maintain at least 26 per cent shareholding for three years.

ICICI Bank and Axis Bank too said they will invest Rs 1,000 crore and Rs 600 crore, respectively, while largest mortgage lender HDFC Ltd will infuse Rs 1,000 crore.

All the investment plans outlined by these lenders on Friday will be for cash consideration.

Meanwhile, Finance Minister Nirmala Sitharaman on Friday said the reconstruction scheme keeps at its core the protection of depositors' interest, providing stability to Yes Bank and keeping a stable financial environment and banking system.

The RBI superseded Yes Bank's board on March 5 and put the lender under a moratorium, restricting withdrawals to Rs 50,000 per account till April 3 due to its precarious financial condition and inability to raise much-needed capital.

Sitharaman said the moratorium on the bank will be lifted within three days of notification of the reconstruction scheme. KPM ABM