New Delhi: State Bank of India (SBI) plans to finalise a deal by the end of March to sell its 24% stake in Yes Bank, valued at 184.2 billion rupees ($2.2 billion), according to four sources with direct knowledge.
Additionally, sources reveal that Sumitomo Mitsui Banking Corp, a Japanese bank, and Dubai-based Emirates NBD are in advanced talks to acquire a majority stake in Yes Bank. Sumitomo Mitsui is affiliated with Sumitomo Mitsui Financial Group, Japan’s second-largest bank.
It is important to note that the Reserve Bank of India (RBI) restructured Yes Bank in March 2020 with the help of a consortium of local banks due to its worsening financial condition. However, according to a source, SBI has received verbal approval from the RBI to sell its entire stake in Yes Bank and is expecting to make a profit of around Rs 100 billion.
“Both the bidders are interested in acquiring a majority stake of 51% in Yes Bank to gain considerable control over the bank’s business,” one of the sources said. “The Reserve Bank of India (RBI) has verbally approved the proposal and due diligence is being carried out.”
Currently, SBI owns around 24% of Yes Bank, while 11 other lenders, including ICICI Bank and HDFC Bank, which were also part of the Yes Bank bailout, collectively own 9.74%.
“The bidders are seeking a relaxation of the regulatory requirement that promoter stake be reduced to 26% within 15 years of investment, and talks are underway,” one of the sources said, referring to the stake of controlling shareholders.
It is worth noting that the SBI clearly stated that there has been no progress in this matter. (With information from Reuters)
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