 "YES Bank denies report on 51% stake sale, calls it 'factually incorrect'")
Private lender YES Bank on Tuesday refuted a news report that claimed the Reserve Bank of India (RBI) has approved for the sale of a 51 per cent stake in the bank.
“The contents of the said article are factually incorrect and purely speculative in nature,” the bank said in a stock exchange filing.
Shares of YES Bank opened a per cent higher in Tuesday’s trade after the clarification shared by the bank.
The development follows an earlier a report by the LiveMint that reported that the RBI has approved a stake purchase in the bank by an appropriate incoming promoter. The RBI typically limits the promoter holding in the domestic banks to 26 per cent. However, this ceiling can be raised by the regulator under special circumstances.
According to the report, the RBI officials were yet to issue a written approval for the deal.
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The news report mentioned that the proposed sale could value the lender by assets at approximately $10 billion, making it the sixth-largest acquisition in the banking sector. If approved, the RBI’s nod would have meant the entry of a new owner for the bank and the exit for the State Bank of India (SBI) and other lenders which jointly own 33.74 per cent, the report said.
In February, the RBI gave the HDFC bank its nod to acquire 9.50 per cent stake in the YES Bank. If the HDFC bank fails to acquire a major shareholding within one year, this approval will be revoked.
In 2020, YES Bank reeled under a major crisis after it was found that its bad loans had grown significantly while its asset quality had declined, prompting the RBI to seize the control of the private lender from its founder-chairman Rana Kapoor.