MUMBAI (Reuters) – India’s Yes Bank (YESB.NS) will not be merged with State Bank of India (SBI.NS), which is set to infuse funds in the beleaguered lender, the newly appointed administrator leading the rescue plan said in a television interview on Monday.
“There is absolutely no question of a merger,” Prashant Kumar, the administrator, told the CNBC TV18 channel.
The Reserve Bank of India (RBI) on Thursday took control of Yes Bank, after the lender – which is laden with bad debts – failed to raise the capital it needs to stay above mandated regulatory requirements.
Placing Yes Bank under a 30-day moratorium, the central bank imposed limits on withdrawals to protect depositors and said it would work on a revival plan. The move spooked depositors, who rushed to withdraw funds from the bank.
Kumar, a former finance chief at SBI, assured depositors their money was safe and that the moratorium on Yes Bank might be lifted much before the deadline on April 3 and normal banking operations might resume as early as Friday.
SBI Chairman Rajnish Kumar said on Saturday the state-run bank would need to invest up to 24.5 billion rupees ($331 million) to buy a 49% stake in Yes Bank as part of the initial phase of the rescue deal, adding that the survival of troubled lender was a “must”.
Reporting by Abhirup Roy; Editing by Euan Rocha and Tom Hogue