Yes Bank News / There is a problem regarding SMBC and NBD buying stake in Yes Bank

The process of buying stake in Yes Bank is in trouble as the buyers are insisting on a 51 percent stake. According to sources, the Reserve Bank of India (RBI) is concerned about such a large stake for foreign entities. The proposals made by SMBC and Emirates NBD are not progressing.

Vikrant Shekhawat : Sep 13, 2024, 09:00 AM

Yes Bank News: The process of buying stake in Yes Bank, one of India's leading private banks, is facing a new crisis. The progress of the deal has been hampered due to the demand of 51 percent stake in the bank by a group of buyers. A source associated with the issue has recently shared some important information.

Buyers' stake demand

According to sources, all the bidders interested in buying stake in Yes Bank, including Japan's SMBC Bank and Emirates NBD, are insisting on a 51 percent stake in the bank. This situation is posing a challenge for the bank, as currently the Reserve Bank of India (RBI) is unhappy with a foreign entity holding 51 percent stake in a large financial institution like Yes Bank.

RBI's concern

The Reserve Bank of India's concern is based on the fact that a foreign entity holding 51 percent stake may affect the financial stability and control of the bank. According to RBI rules, a maximum of 26 per cent stake can be held by an entity in any bank, and in case of more than this, a certain time limit is given to reduce it.

Hallo in progress on deal

Sources said that there has been no significant progress on the 'fit and proper' aspects related to this deal. Big buyers like SMBC and Emirates NBD are in talks directly with the RBI for a controlling stake in Yes Bank, but both the companies have not indicated their readiness to give ownership control of Yes Bank.

SBI's position

A group of lenders led by SBI (State Bank of India) bought stake in the bank under a special scheme in 2020 to rescue Yes Bank from financial crisis. SBI currently holds 24 per cent stake in Yes Bank. SBI plans to sell its stake by the end of FY 2024-25, which may further increase the complexities of this deal.

Future direction

If no solution is found in this situation, the process of selling Yes Bank's stake may be delayed. The outcome of the ongoing negotiations between the buyers and the RBI will determine the future direction of the bank. Balancing the stake demand of foreign investors and the existing regulatory rules is a big challenge, which needs to be resolved as soon as possible.

The successful completion of this deal will be important for the future of Yes Bank, but in view of the current complexities, it may take time. This process is very important to maintain stability in the market of banks and financial institutions.