The Reserve Bank of India (RBI) has approved the sale of up to 51 per cent stake in YES Bank, potentially ushering in new ownership for the private lender that faced a severe crisis just four years ago, according to sources cited by Mint. This landmark decision could value India's sixth-largest private bank by assets at approximately $10 billion, making it the largest acquisition in the country's banking sector.
According to the report, the RBI has given a preliminary nod to YES Bank and its key shareholders, despite its usual cap on promoter holding in domestic banks being set at 26 per cent.
“Some of the bidders are interested only if they are allowed to acquire 51 per cent 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 51 per cent sale of control to an appropriate incoming promoter," said a source familiar with the matter.
Although RBI officials have verbally agreed to the sale proposal, formal written approval is still pending as the central bank evaluates the suitability of the prospective bidders.
This decision highlights the central bank's recognition of YES Bank's unique situation, including its shareholder composition, loan portfolio, and liquidity requirements.
YES Bank has engaged Citigroup to identify potential promoters. A spokesperson for Citigroup declined to comment on the matter.
State Bank of India (SBI) and other lenders, which collectively control 33.74 per cent of YES Bank, now have an exit route thanks to the RBI's clearance. SBI itself holds 23.99 per cent in YES Bank, while other banks and entities like LIC, CA Basque Investments, and Verventa Holdings hold significant stakes.
The RBI has also urged some of these banks not to sell their shares on the open market, according to the report. This move is set to reshape the future of YES Bank and potentially the broader Indian banking sector as new ownership takes the helm.