SBI chief: Investments in Yes Bank aimed at providing financial stability, not ROI

Mumbai: SBI Chairman Rajnish Kumar on Monday said investments by banks in the 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 State Bank of India (SBI), along with seven other financial institutions, invested around Rs 10,000 crore in the crisis-hit Yes Bank last week, under the RBI-mandated reconstruction scheme.

"The decision of the 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 on the sidelines of the listing ceremony of SBI Cards and Payment Services at the BSE.

SBI Card, the second largest largest credit card issuer in the country, got listed at 13 per cent discount at Rs 658 on the BSE, against the issue price of Rs 755.

The scrip settled the day at Rs 683.20, up nearly 4 per cent.

Last week, SBI invested Rs 6,050 crore in the troubled lender. It would hold up to 49 per cent stake in the private lender, with a minimum of 26 per cent over next three years.

ICICI Bank, Housing Development Finance Corp Ltd, Axis Bank, Kotak Mahindra Bank, Bandhan Bank, Federal Bank and IDFC First also joined the SBI-led consortium and invested in Yes Bank.

Mortage lender HDFC and ICICI Bank invested Rs 1,000 crore each in Yes Bank. Axis Bank has invested Rs 600 crore by buying 60 crore shares and Kotak Mahindra Bank Rs 500 crore through 50 crore shares.

Federal Bank and Bandhan Bank put in Rs 300 crore each. IDFC First invested Rs 250 crore into the lender.