Yes Bank's stake sale stuck as RBI concerned with majority ownership by foreign bank

On August 1, Moneycontrol reported that RBI has asked investors seeking a controlling stake in Yes Bank to reconsider their demands, including acquiring and retaining a majority stake, potentially prolonging the deal process.

“After the initial discussions with the regulator, potential bidders have been asked to review their stance on certain important deal terms,” one of the people said, requesting anonymity. The investors have made two key requests, according to the people cited on August 1.

First, investors want to hold a 51 percent stake in the bank perpetually.

“The incoming investors are not keen to dilute their holding in the bank less than 51 percent stake at any point in time,” said a person aware of the matter earlier.

However, bank licensing norms require promoters to reduce their stake to 26 percent within 15 years of starting operations.

To address this, the RBI has proposed a gradual glide path for investors to reduce their stake in YES Bank over time, indicating that maintaining a perpetual 51 percent holding may not be possible, the person said.

According to media reports, SBI has placed its 24 percent stake in Yes Bank on the block. Other banks, including Axis Bank, Kotak Mahindra Bank, ICICI Bank, and HDFC Bank, collectively own 7.4 percent of the bank. PE investors Carlyle and Advent collectively own about 14 percent of Yes Bank.