Yes Bank says no RBI in-principle approval to hold 20% in ARC; denies media reports

Yes Bank, on Wednesday, issued a clarification that it has not received any in-principle approval by the Reserve Bank of India (RBI) to hold a 20 per cent stake in any asset reconstruction company. It said that the media reports on this matter are speculative. The lender issued a statement in response to the clarification sought by BSE. 

“The Bank would like to clarify that certain news articles reported by media carrying a reference to RBI giving in-principle approval to the Bank to hold 20 per cent stake in ARC is speculative and has no bonafide reference. The Bank is not aware of the source, which resulted in the abovementioned news item and as a matter of policy, the Bank would not like to comment on such speculation,” it said. 

It further added that Yes Bank has initiated a process to select a partner for an ARC by calling a public expression of interest. “Currently, the process is underway and at this point of time, there is no binding/effective decision in this regard,” it clarified, further adding that it would keep the exchanges informed of further developments. 

The clarification came after media reports, quoting sources, on Tuesday said that the RBI gave an in-principle approval to the lender to pick a 20 per cent stake in JC Flowers & Co’s asset reconstruction company. 

The report added that Yes Bank will be classified as the sponsor of the ARC, and that it will be required to spend approximately Rs 300-400 crore to acquire the stake. The approval, it said, was granted under the regulator’s norms that govern bank ownership of ARCs in India. 

Banks can only acquire a 9.9 per cent stake in any ARC, but any acquisition higher than that requires the RBI’s permission. 

Also read: Yes Bank loans rise 14% by June-end; RBL Bank's up by 7%