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Investments by banks in crippled Yes Bank aimed at maintaining financial stability in system, not RoI: SBI Chief

SBI has invested Rs 6,050 crore in crisis-ridden Yes Bank.

SNS | New Delhi |

State Bank of India Chairman Rajnish Kumar, while clearing the need of the financial aid to the financially-troubled Yes Bank, said that investments by banks in crippled Yes Bank are being made to maintain financial stability in the system, and not guided by the principle of return on investment (RoI).

“The decision of the State Bank of India (SBI) and all other banks coming together, it is not guided by the return on capital principles or investments. It is all guided by providing stability to the financial system,” Kumar told reporters at the listing ceremony of SBI Cards and Payment Services here on Monday.

Shares of SBI Cards and Payment Services Ltd., a unit of country’s largest lender, started trading earlier in the day at a discount of 12.5 per cent over its issue price of Rs 755. The initial public offering (IPO), which was open for subscription from March 2 to March 5, started trading at Rs 661 on the National Stock Exchange (NSE).

So far, the shares saw a high of Rs 755 and low of Rs 656.

SBI has invested Rs 6,050 crore in crisis-ridden Yes Bank.

The SBI-consortium is joined by companies like ICICI Bank, Housing Development Finance Corp Ltd, Axis Bank, Kotak Mahindra Bank, Bandhan Bank, Federal Bank and IDFC First.

HDFC will invest Rs 1,000 crore in Yes Bank through a purchase of 100 crore shares. Axis Bank will invest Rs 600 crore by buying 60 crore shares and Kotak Mahindra Bank Rs 500 crore through 50 crore shares.

Bandhan Bank will invest another Rs 300 crore through the purchase of 30 crore shares. IDFC First and Federal Bank have invested Rs 250 crore and Rs 350 crore, respectively, in the lender.

(With input from agencies)