Whereas, the Yes Bank Limited is a banking company
registered under the Companies Act, 1956 (1 of 1956) and carrying on the
business of banking in India; And whereas, the rapidly deteriorating financial
position of the Yes Bank Limited relating to liquidity, capital and other
critical parameters, and the absence of any credible plan for infusion of
capital necessitated the Reserve Bank of India to take immediate action in the
public interest and particularly in the interest of the depositors and
accordingly, the Yes Bank Limited was placed under moratorium by an order of
the Government of India in the Ministry of Finance, Department of Financial
Services vide notification number S.O. 993(E), dated the 5th March, 2020 in
exercise of the powers conferred by sub-section (2) of section 45 of
the Banking Regulation Act, 1949 (10 of 1949); And whereas, during the period of moratorium, the
Reserve Bank of India has considered it necessary in the public interest and in
the interest of the depositors and also to secure the management of the banking
company, to prepare a scheme for the reconstruction of the concerned banking
company; And whereas, the State Bank of India and certain
other investors have expressed their willingness to make investment in the Yes
Bank Limited and to participate in its reconstruction scheme; And whereas, the Central Government has accorded
its sanction to the said scheme for reconstruction. Now, therefore, in exercise of the powers conferred
by sub-section (4) and sub-section (7) of section 45 of the Banking
Regulation Act, 1949 (10 of 1949), the Central Government hereby notifies the
following scheme, namely: - (1) This Scheme may be called the Yes Bank Limited Reconstruction Scheme,
2020. (2) It shall come into force on the 13th day of March, 2020. (1) In this Scheme, unless the context otherwise requires (a) "Act" means the Banking Regulation Act, 1949 (10 of 1949); (b) "investor" means any person other than the investor Bank
willing to invest in the reconstructed bank under this Scheme; (c) "investor bank" means the State Bank of India, constituted
under the State Bank of India Act, 1955 (23 of 1955); (d) "reconstructed bank" means the Yes Bank Limited, a banking
company having its registered office at Yes Bank Tower, IFC-2, 15th Floor,
Prabhadevi (W), Mumbai-400013, Maharashtra; (e) "Reserve Bank" means the Reserve Bank of India, constituted
under the Reserve Bank of India Act, 1934 (2 of 1934). (2) Words and expressions used herein and not defined but defined in the Act
shall have the meanings respectively assigned to them in the Act. (1) The authorised capital of the reconstructed bank shall stand altered to
Rs.62,00,00,00,000 (Rupees Six thousand two hundred crore only) and number of
equity shares to 30,00,00,00,000 (Three thousand crore only) of rupees two only
each, aggregating to Rs.60,00,00,00,000 (Rupees Six thousand crore only). (2) The authorised preference share capital shall continue to be Rs.
200,00,00,000 (Rupees two hundred crore only). (3) The investor bank and other investors, shall invest in the reconstructed
bank and the reconstructed bank shall allot equity shares of the reconstructed
bank, at a price of rupees ten only with face value of rupees two only and
premium of rupees eight only, subject to the condition that post infusion of
equity capital, the equity shareholding of the investor bank shall not be less
than twenty-six per cent. and not more than forty-nine per cent. of the total
equity shares of the reconstructed bank. (4) The investor bank shall not reduce its equity shareholding below twenty
six per cent. of the total equity shareholding of the reconstructed bank before
completion of three years from the date of allotment of the shares. (5) An investor, other than the investor bank, may exercise voting rights to
the extent of (i) its shareholding; or (ii) nine per cent. of the total voting rights of all the shareholders of
reconstructed bank; or (iii) as may be decided by the Reserve Bank, whichever is lower: Provided that the Reserve Bank may after satisfying
itself that an investor (other than the investor bank) holding more than nine
per cent. of the equity shares in the reconstructed bank is 'fit and proper' to
hold voting rights in excess of nine per cent., permit such investor to
exercise voting rights to the extent of its shareholding or up to fifteen per
cent. of the total voting rights of all equity shareholders of the
reconstructed bank, whichever is less. (6) The reconstructed bank shall allot its equity shares within two working
days following the commencement of this Scheme. (7) The investor bank and investors who have subscribed to the shares of the
reconstructed bank under this Scheme shall not be liable to pay capital gains
tax under the Income-tax Act, 1961 (43 of 1961) for any deemed profits or gains
on account of such subscriptions. (8) There shall be a lock-in period of three years from the commencement of
this Scheme to the extent of seventy-five per cent. in respect of (a) shares held by existing shareholders on the date of such commencement; (b) shares allotted to the investors under this Scheme: Provided that the said lock-in period shall not
apply to any shareholder holding less than one hundred shares. The following articles of association of the
reconstructed bank shall be omitted, namely: (a) article 110(b); (b) article 127 (b); (c) article 127A (a); and (d) article 127A (b). (1) The office of the Administrator of the reconstructed bank, appointed by
the Reserve Bank of India, shall stand vacated immediately after seven calendar
days from the date of cessation of moratorium under paragraph 11 and a new Board
of Directors shall be reconstituted comprising of the following persons,
namely: (i) Shri Prashant Kumar, former Chief Financial Officer and Deputy Managing
Director of State Bank of India, as Chief Executive Officer and Managing
Director; (ii) Shri Sunil Mehta, former Non-Executive Chairman of Punjab National Bank,
as Non-Executive Chairman; (iii) Shri Mahesh Krishnamurthy as Non-Executive Director; (iv) Shri Atul Bheda as Non-Executive Director. (2) The investor bank shall nominate two officers as Directors in addition
to the members appointed under sub-paragraph (1). (3) The Reserve Bank of India may appoint one or more persons as additional
directors as it may consider necessary. (4) Any investor who is permitted to have voting right of fifteen per cent.
shall have the right to nominate one director on the Board constituted under
sub-paragraph (1). (5) It will be open to the Board of Directors to co-opt more directors to
it, so however that the total membership in the Board, excluding the additional
directors appointed by the Reserve Bank of India under sub-paragraph (3), shall
not exceed the maximum prescribed by the articles of association. (6) The appointment of the directors shall have effect, notwithstanding
non-fulfillment of any requirement as to minimum shareholding, qualification,
experience or any other condition, for being a director of the reconstructed
bank. (7) The members of the Board, other than the additional directors, so
appointed shall continue in office for a period of one year, or until an
alternate Board is constituted by reconstructed bank in accordance with the
procedure laid down in its memorandum and articles of association, whichever is
later. (8) Any defect in the constitution or any vacancy in the Board shall not
invalidate any meetings conducted by the Board or any decision taken by it. (9) The investor bank and the investors shall be treated as 'public
shareholders' of the reconstructed bank for a period of five years from the
date of allotment of shares to them under all applicable laws. (1) Unless otherwise expressly provided in this Scheme, all contracts,
deeds, bonds, agreements, powers of attorney, grants of legal representation
and other instruments of whatever nature, subsisting or having effect immediately
before the commencement of this Scheme, shall be effective to the extent and in
the same manner, as was applicable before such commencement. (2) It shall not be necessary to obtain the consent of any third party or
other person who is a party to any of the aforesaid instruments or arrangements
to give effect to them. (3) All the deposits with and liabilities of the reconstructed bank, except
as provided in this Scheme, and the rights, liabilities and obligations of its
creditors, shall continue in the same manner and with the same terms and
conditions, completely unaffected by this Scheme. (4) No person shall be entitled to get any compensation from the
reconstructed bank on account of the changes in the reconstructed bank by
virtue of this Scheme. (5) Any cause of action accrued, suit, appeal or other proceeding of
whatever nature pending, and decree or recovery certificate obtained by or
against the reconstructed bank, shall remain unaffected by this Scheme. All employees of the reconstructed bank shall
continue to be employees of the reconstructed bank with the same remuneration
and on the same terms and conditions of service, including terms of
determination of service and retirement, as were applicable to such employees
immediately before the commencement of this Scheme, for a minimum period of one
year: Provided that the Board of Directors of the
reconstructed bank shall, for reasons to be recorded in writing and after
following the due procedure, discontinue the services of the key managerial
personnel at any time as it deems necessary. (1) The offices and branches of the reconstructed bank shall continue to
function in the same manner and at the same location where they were
functioning prior to the commencement of this Scheme, without in any way being
affected by this Scheme. (2) It shall be open to the reconstructed bank to open new offices and
branches or close down existing offices or branches, in accordance with the
guidelines of the Reserve Bank and after complying with the necessary terms and
conditions. The reconstructed bank shall submit to the Reserve
Bank such statements and information as may be required by the Reserve Bank
from time to time, regarding the implementation of this Scheme or any other
matter relating thereto. (1) Any notice or other communication required to be given to the
reconstructed bank shall be considered to be duly given, if addressed to and
sent by speed post or by courier or by pre-paid ordinary post or by email at
the address of the registered office of the reconstructed bank. (2) Notwithstanding anything contained in sub-paragraph (1), any notice or
communication, which is of general interest, shall be advertised, in addition,
in one or more daily newspapers, which may be in circulation at the place where
the registered office of the reconstructed bank is situated. The order of moratorium on the reconstructed bank
issued by the Government of India in the Ministry of Finance, Department of
Financial Services vide notification number S.O. 993(E), dated the 5th March,
2020 shall cease to have effect on the third working day at 18:00 hours from
the date of commencement of this Scheme. If any doubt arises in the interpretation of the
provisions of this Scheme, the matter shall be referred to the Reserve Bank and
its views on the issue shall be final and binding on all concerned. YES BANK LIMITED RECONSTRUCTION SCHEME, 2020
PREAMBLE