Yes Bank's head office in Mumbai, India. Photo: Himanshu Bhatt/NurPhoto

Troubled private lender Yes Bank, which is being revived under the watch of the central bank, received a jolt when one of its founders offloaded a part of her shareholding.

According to regulatory filings, Madhu Kapur, the widow of founder-chairman Ashok Kapur, sold 25 million bank shares in a block deal. She is the single largest shareholder in the bank. The shares have been pledged with HSBC Investdirect Financial Services (India).

The sale makes up about 14% of Kapur’s stake. Prior to the sale, she held 176 million shares in the bank. According to the bank reconstruction scheme, shareholders cannot sell 75% of the shareholding for three years.

Interestingly, the sale happened on the day the Reserve Bank of India lifted its moratorium. The central bank had imposed it after the lender’s liquidity levels plunged due to a rapid flight of depositor’s money. Yes Bank lost 720 billion rupees (US$9.73 billion) worth of deposits in the past six months.

On March 5, the central bank imposed a limit on withdrawals from Yes Bank accounts to 50,000 rupees ($675) a month with few exceptions.

The announcement of a moratorium caused panic among Yes Bank customers and triggered a scramble to withdraw money. But they were unable to access internet banking, make digital payments and withdraw money from ATMs.

The Reserve Bank of India has extended a credit line of 600 billion rupees to Yes Bank to ensure the bank is able to meet its obligations to depositors, the Business Standard reported.

On Monday, Central Bank Governor Shaktikanta Das said the regulator was ready to offer liquidity if required. “Yes Bank has enough liquidity to meet any requirements. If required, the bank regulator will provide necessary liquidity support to it,” he said.

However, the reserve bank will be the “lender of the last resort.” Yes Bank will have to use its immediate liquid assets before it can touch the credit line. This is perhaps the first time the RBI has come up with such an arrangement.

Meanwhile, the central bank appointed administrator of Yes Bank, Prashant Kumar, expressed confidence about a turnaround. He said Yes Bank is hoping to recover about 85 billion rupees from its loan defaulters, mostly corporate entities, in the coming financial year, which begins on April 1.

In the December-quarter results, which the bank announced last week, its gross non-performing assets more than doubled to 407 billion rupees from 171 billion rupees in September.

He claimed that only a third of customers withdrew the 50,000 rupees allowed during the moratorium. “We have had higher inflows than outflows in the last few days,” Kumar said.