Wednesday, July 17, 2024

RBI Approves Sale Of Up To 51% Stake In YES Bank | Pragativadi | Odisha News, Breaking News Odisha, Latest Odisha News – N.F Times

New Delhi: The Reserve Bank of India (RBI) has given its approval for the sale of up to 51% stake in YES Bank, potentially leading to new ownership for the private lender that had faced a severe crisis four years ago.

This decision is expected to value the bank at around $10 billion, making it the largest acquisition in India’s banking sector. The RBI has granted a preliminary nod to YES Bank and its major shareholders, despite the usual cap on promoter holding in domestic banks being 26%.

The central bank has agreed to a 51% sale of control to a suitable incoming promoter in a special case. While verbal approval has been given by RBI officials, formal written approval is still pending as the central bank assesses the suitability of the potential bidders.

This decision underscores the RBI’s recognition of YES Bank’s unique situation, including its shareholder composition, loan portfolio, and liquidity requirements. YES Bank has enlisted Citigroup to identify potential promoters, but a spokesperson for Citigroup declined to comment on the matter.

With the RBI’s clearance, the State Bank of India (SBI) and other lenders, who collectively control 33.74% of YES Bank, now have an exit route. SBI itself holds 23.99% in YES Bank, while other banks and entities like LIC, CA Basque Investments, and Verventa Holdings also hold significant stakes.

Additionally, the RBI has advised some of these banks not to sell their shares on the open market. This monumental decision is set to reshape the future of YES Bank and potentially the broader Indian banking sector as new ownership takes charge.

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