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Making efforts to financially strengthen bank further: Yes Bank

Allaying concerns over reports of its weakening financial health, Yes Bank on Wednesday said the lender’s capital adequacy is at a comfortable level and efforts are being made to further strengthen it.

The bank has asked its customers not to pay heed to rumours about its financial health.

“The bank’s overall Capital Adequacy Ratio is comfortably above regulatory requirements and all efforts are being made to financially strengthen the bank even further. Kindly, therefore, pay no heed to these unfounded reports,” Yes Bank said in a statement.

The bank plans to convene an extraordinary general meeting on February 7 to get shareholders’ nod for raising Rs 10,000 crore, and to increase authorised capital from existing Rs 800 crore to Rs 1,100 crore, already cleared by the board.

Last week, Uttam Prakash Agarwal, an independent director of Yes Bank resigned from the board and stepped down as head of its audit committee citing major corporate governance concerns.

The capital-starved bank also reported setbacks in its USD 2-billion fundraising plans.

Canadian investor Erwin Singh Braich’s USD 1.2 billion offer will not be pursued further, the bank had said.

It had further said a USD 500-million offer from Citax Holdings and Citax Investment Group, which was being favourably considered, is also facing headwinds.

The bank, which was waiting for regulatory approvals as Citax’s offer entailed over 10 per cent ownership, has not been able to get a clearance yet on the “conditions precedent”. Without specifying timelines, it said the Citax offer will be taken up “during the next round”.

The troubled bank has been forced to shrink its book due to capital paucity and was hoping to close the fundraising by December.

Need for capital has been necessitated as under new CEO Ravneet Gill, the lender has had to provide for sour loan bets taken under his predecessor Rana Kapoor whose term was cut short by the RBI in 2018 over concerns on corporate governance. The central bank has also appointed former deputy governor R Gandhi to the board. (PTI)

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