Hate speech: Jagadish Karanth granted interim bail hours after arrest

New Delhi, Mar 6: Shares of YES Bank and State Bank of India came under huge selling pressure on Friday as developments unfolded regarding SBI picking stake in the private lender. Shares of the lender hit record low of Rs 5.55, plunging 85 per cent, and were trading below its previous low of Rs 8.16 hit on March 9, 2009.

SBI, on the other hand, slumped 11 per cent to Rs 257.35 on the BSE. The benchmark S&P BSE Sensex was trading with a cut of over 3 per cent at 37,251.37 level.

In the past three months, share price of the private lender has plunged 41 per cent, while the state-owned lender has slipped 14 per cent. In comparison, the S&P BSE Sensex has dipped 5.6 per cent till Thursday.

On Thursday, the Reserve Bank of India superseded the board of troubled private sector lender YES Bank and imposed a 30-day moratorium on it “in the absence of a credible revival plan” amid a “serious deterioration” in its financial health.

During the moratorium, which came into effect from 6 pm on Thursday, YES Bank will not be allowed to grant or renew any loans, and “incur any liability”, except for payment towards employees’ salaries, rent, taxes and legal expenses, among others.

This is the first time that a bank of this size will be put under a moratorium by the RBI.

“The financial position of YES Bank had undergone a steady decline “largely due to inability of the bank to raise capital to address potential loan losses and resultant downgrades, triggering invocation of bond covenants by investors, and withdrawal of deposits,” RBI said in a statement.

“After the moratorium, the next step will be to infuse to money and keep the bank afloat. So from shareholders’ point of view, the future is certainly hazy as the capital requirement is huge. The good part, however, is that the RBI has stepped in and depositors don't have to worry,” says Siddharth Purohit, a research analyst at SMC Securities.

Meanwhile, analysts at Nomura believe that placing the Bank under moratorium implies that equity value in the bank would be negligible, and that the chances of private capital participating in future capital raising plan are near zero.

"Any resolution for Yes Bank is more proposed from the perspective of deposit holders and systemic stability, and not from the perspective of Yes Bank equity investors or even perpetual bond holders," they wrote in a note dated March 6.

In another development, SBI’s Board Thursday gave in-principle approval to consider an “investment opportunity” in YES Bank, even as it said “no decision had yet been taken to pick up stake in the bank”.

According to a  report, highly-placed sources indicated a rescue plan involving SBI and Life Insurance Corporation of India (LIC) was being discussed and an announcement in this regard might be made soon.

“While the finer details of the deal are being worked out, it is anticipated that both SBI and LIC together will take a 51 per cent stake in the bank, with a one-year lock-in period,” the report said.

Most analysts believe it is a positive step for the Indian financial sector as the government has tried to avoid a repeat of IL&FS-like crisis.

“The move is a positive step for the financial sector as a whole. By this, the government has tried to avoid a repeat of IL&FS-like crisis and has saved the depositors,” said AK Prabhakar, Head of Research at IDBI Capital. While we know that YES Bank has a huge pile of bad loans, SBI is the only bank that has the capacity to absorb it, he added.

However, the valuation at which YES bank would be taken over remains a cause of concern.

Global brokerage firm JP Morgan Thursday cut its target price for YES Bank on Thursday to Rs 1 per share, taking into account the potential fall in the lender’s net worth due to stressed assets.

“We believe forced bailout investors will likely want the bank to be acquired at near-zero value to account for risks associated with the stress book and likely loss of deposits. We think the bank will need to be recapitalised at nominal equity value and could test dilution of additional tier 1 (AT1) capital. We remain underweight and cut our target price to Rs 1 as we believe net worth is largely impaired,” JP Morgan said in a note.

Global brokerage firm Nomura estimates a need of Rs 25,000-44,000 crore and adjusted for Rs 7,400 crore of current coverage, if the current stress of Rs 65,000-70,000 crore faces 70 per cent loss given default (LGD).

"It implies Rs 18,000-37,000 crore needed for provisioning against the current net worth of Rs 25,700 crore Also, to run as going concern, the bank would require over Rs 20,000 crore of CET-1 capital as well," the note said.

YES Bank has registered slippages of Rs 12,000 crore so far in FY20, while it has placed Rs 30,000 crore of loan assets under the watch list. Its deposits stood at Rs 2.09 trillion on September 30, 2019, while its advances totalled Rs 2.24 trillion. The bank has delayed publishing its December quarter results by a month to March 14.

Bengaluru, May 18: Karnataka chief minister B S Yediyurappa today announced lockdown relaxations from tomorrow (May 19) across the state. As per new guidelines public transport services will start operations outside COVID-19 containment zones in the state. 

 “To facilitate easy movements of citizens, services of the BMTC, KSRTC, NEKRTC and NWKRTC will start from Tuesday morning, except in containment zones. Even private buses can ply,” Yediyurappa said, after discussing the Centre's Lockdown 4.0 guidelines with his Cabinet colleagues and officials. 

“The only condition is that only 30 people should travel in one bus so as to ensure social distancing,” the CM said. 

He also clarified that bus fares will not be hiked. “I know there will be losses incurred. The government will bear the losses,” he said. 

Auto rickshaws, taxis and maxi cabs (six-passenger vehicles) will also be allowed to operate. “Auto rickshaws and taxis will have a driver and two passengers. Maxi cabs will have a driver and three passengers,” Yediyurappa said. 

All parks in the state will be open 7 am to 9 am and 5 pm to 7 pm. 

Starting Tuesday, all shops except malls and theatres can open. “This includes salons,” the CM said. 

All relaxation will cease to exist every Sunday, the CM said. “Every Sunday will be a complete lockdown. There’ll be no shops and the movement of people. It’ll be a complete rest day,” he said. 

The existing curfew from 7 pm to 7 am will continue on all days, which means public transport services will not be allowed during this time. 

Trains will run within the state, but interstate trains will not be allowed till May 31, the CM said. 

It is mandatory for citizens to wear masks in public. “Not wearing a mask will be penalised,” Yediyurappa said. 

On the classification of zones, Yediyurappa said the government's main focus was containment zones. “We're particular about containment zones. In the Karwar district, for example, Bhatkal will be a containment zone and no other taluk will have restrictions,” he said. 

However, the government will review the relaxation based on how things pan out. “States have been given the freedom, so we can withdraw or modify as necessary,” he said.

Thiruvananthapuram, Feb 6: The 105-year-old Bageerathi Amma who scripted history when she appeared for her fourth standard exam in last November becoming the oldest learner of the Kerala State Literacy Mission has passed her exam with 74.5 per cent marks.

This grandmother from Parakulam in Kollam district of Kerala Bageerathi Amma has six children and 16 grandchildren.

Speaking to news agency ANI, CK Pradeep Kumar, district co-ordinator of State Literary Mission said on Wednesday, "Bageerathi Amma has passed her exam with 74.5 per cent marks. It is really an inspiration for others to follow her and continue their education," he said.

Ms Bageerathi had to stop her education at the age of nine when she was in Class 3 as she had to take care of her younger siblings.

Her yearning to continue her studies was fulfilled with the help of officials of the Literary Mission who helped her to realize her dreams. She scored 205 marks out of a total of 275 in the fourth standard equivalency examination.

The Kerala State Literacy Mission Authority is an autonomous institution under the General Education Department, Government of Kerala.

The programme aims to develop literacy skills through continuing education, provide chances of each and everyone interested in learning, enable the learners to make use of their learning in their daily life and ensure Secondary-level education to the whole of Kerala.

The main beneficiaries of this programme are illiterates, neo-literates, school drop-outs and those interested in lifelong education.