Bidder Dispute Threatens Yes Bank Stake Sale

Bidders' demand for a 51 per cent stake in Yes Bank could jeopardize the acquisition. Sources indicate the Reserve Bank of India (RBI) is uncomfortable with a foreign entity having controlling stakes. Currently, regulations cap ownership at 26 per cent, causing negotiations to stall.

Bidders' insistence on acquiring a 51 per cent stake in Yes Bank could endanger the acquisition, according to informed sources on Thursday.

When asked whether the deal would finalize by the fiscal year's end, the source, not authorized to speak to the media, disclosed that the deal remains uncertain.

Talks have stalled due to bidders' push for a controlling stake, which makes the Reserve Bank of India (RBI) uncomfortable, especially with a foreign entity like Japan's SMBC or Emirates NBD.

Currently, regulations permit a maximum of 26 per cent ownership by a single entity in a bank, with stringent conditions for higher stakes.

The source added no progress on the 'fit and proper' requirements. SMBC's leadership recently visited the country for discussions with RBI and SBI regarding the acquisition.

In 2020, Yes Bank was bailed out by an SBI-led consortium, with SBI now owning 24 per cent stakes worth USD 2.2 billion. The lock-in period on this investment has recently ended, prompting new stake sell discussions.

(With inputs from agencies.)