Mumbai, July 7 (IANS) Yes Bank on Tuesday said that its Capital Raising Committee of the Board of Directors has approved raising funds by way of a further public offering.
The committee took the decision at its two-hour long meeting on Tuesday.
"The Capital Raising Committee of the Board of Directors of the Bank ('CRC"'), at its meeting held earlier today i.e., July 7, 2020, has approved raising funds by way of a further public offering," the bank said in a regulatory filing.
It further said that post closure of the requisite formalities with the Registrar of Companies, Maharashtra at Mumbai, the details in respect of the offer will be disseminated in accordance with the provisions of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.
The bank's CRC will again meet on or after July 10 to consider and approve, amongst other things, the price band and discount, if any, as permitted under the provisions of the SEBI ICDR Regulations.
New Delhi, Aug 8 (IANS) Public sector banks would need to increase their provisioning buffer factoring in the incremental provisioning requirement on restructured loans and potential NPAs, a report said.
To discourage rampant and unviable restructuring, the RBI has now mandated that banks will be required to make high provisions at 10 per cent on restructured retail/corporate loans (20 per cent on corp loans for banks outside inter-creditor agreement).
According to analysts, higher provisioning cost would deter unwarranted restructuring. But, this would put pressure on the PSBs to accelerate the pace of increasing their provisioning buffer or disallow restructuring, even in genuine case of stress due to the Covid-19 pandemic.
"Assuming Covid-19-induced stressed loans at 10-15 per cent and at least 50 per cent restructured in the worst case, our rough calculations show systemic level immediate additional provisioning cost at 10 per cent could be 50-75 bps," Emkay Global Financial Services said in a report.
This would mean certain banks would fare better while restructuring loans under stress owing to the pandemic. While ICICI/Axis carry contingent provisions of 125-130 bps, HDFCB/KMB/IIB/RBL have around 60 bps. But large PSBs have contingent provisions of just 10-15 bps.
"Thus, we believe that some banks may have to further accelerate their provisioning buffer, factoring in the incremental provisioning requirement on restructured loans and potential NPAs," Emkay said in its report.
The provision required for restructured loans, however, provides for reversal of 50 per cent of provisioning on retail loans in case the borrower pays 20 per cent residual debt, and the balance 50 per cent on payment of another 10 per cent without slipping into NPA.