HomeNewsBusinessBanksRBI gives the green light to sale of up to 51% stake in Yes Bank: Report
The RBI recently gave a preliminary nod to Yes Bank and its key shareholders. This decision is notable as the RBI typically limits promoter holding in domestic banks to 26 percent, the report said.
July 09, 2024 / 08:30 IST
The decision to approve the stake sale reflects the central bank's acknowledgment of Yes Bank's distinctive circ*mstances, including its shareholder composition, loan portfolio, and liquidity needs, as per the report.
The Reserve Bank of India (RBI) has approved the sale of up to 51 percent stake in Yes Bank, paving the way for a new ownership of the private lender that faced a severe crisis just four years ago, reported Mint.
Sources familiar with the matterÂwhoÂspoke to Mint, revealed that a potential sale could value India'sÂsixth-largest private bank by assets at approximately $10 billion, making it the largest acquisition in the country's banking sector.
The RBI recently gave aÂpreliminary nod to Yes Bank and its key shareholders. This decision is notable as the RBI typically limits promoter holding in domestic banks to 26 percent, the report said.
âSome of the bidders are interested only if they are allowed to acquire 51 percent in the bank. While assessing the fit and proper criteria for the potential new promoter (of Yes Bank), as a special case, the RBI has agreed for a 51Âpercent sale of control to an appropriate incoming promoter," one of the two people cited above said.
While the RBI officials have verbally agreed to the sale proposal, a formal written approval is yet to come. The RBI is evaluating the suitability of the prospective bidders, said another source.
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The decision to approve the stake sale reflects the central bank's acknowledgment of Yes Bank's distinctive circ*mstances, including its shareholder composition, loan portfolio, and liquidity needs, as per the report.
Yes Bank has enlisted Citigroup to identify potential promoters, although a spokesperson for Citigroup declined to comment on the matter, it added.
State Bank of IndiaÂand other lenders, who collectively control 33.74 percent in Yes Bank, which has assets of over Rs 4 trillion, now have an exit route, thanks to the RBI clearance.
SBI owns 23.99 percent in Yes Bank, 2.75Âpercent of HDFC Bank, 2.39 percent of ICICI Bank, 1.21Âpercent of Kotak Mahindra Bank, and 1.01Âpercent of Axis Bank. LIC owns 3.98 percent in Yes Bank, CA Basque Investments 8.74 percent, and Verventa Holdings 9.21 percent. The total amount of shares held by banks in Yes Bank has decreased from 36.74Âpercent in March and 35.18 percent in April.
The second source stated that the RBI has urged a few of these banks not to sell their shares on the open market, according to Mint.
Moneycontrol News
first published: Jul 9, 2024 08:29 am
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