BENGALURU (Reuters) - The State Bank of India (SBI) (SBI.NS) said on Thursday it would invest 72.50 billion rupees ($977 million) for an initial stake in Yes Bank (YESB.NS) as part of a rescue deal for the troubled lender.
The approval comes days after India placed its fifth-largest private sector lender under a moratorium following a serious deterioration in the lender’s financial position.
The rescue plan for Yes Bank involves SBI, the country’s largest lender, buying a stake in the troubled lender, with the Reserve Bank of India last week increasing the bank’s authorized share capital to make way for a cash injection.
Last week, SBI said it would need to invest 24.5 billion rupees if it had to buy a 49% stake in the lender.
SBI said here on Thursday its stake in Yes Bank will remain within 49% but did not offer further details. Yes Bank did not immediately respond to a request for comment.
Yes Bank, weighed down by an increasing pile of bad debt, has struggled for months to raise the capital it needs to stay above regulatory requirements, without any success.
Reporting by Chandini Monnappa in Bengaluru; Editing by Sherry Jacob-Phillips and Saumyadeb Chakrabarty