Yes Bank scouts for partner to set up asset reconstruction firm

By: |
August 12, 2021 3:00 AM

Bidders must have global experience in the distressed assets space, and a track record of turning around or resolving non-performing assets (NPAs), apart from satisfying the central bank’s ‘fit and proper’ criteria.

They must also have demonstrated ability to commit funds for investment or deployment in Indian companies or assets of approximately $0.5 billion.

Yes Bank on Wednesday said in a public notice that it is looking for a partner to join the bank in setting up an asset reconstruction company (ARC).

The prospective investor must be a player with experience in the distressed assets space, and it will be the lead partner in the ARC.

“The Prospective Investor would be the lead partner/sponsor of the ARC, with the Bank as the other significant partner/sponsor, for conducting the business of asset reconstruction in adherence with existing RBI (Reserve Bank of India) guidelines governing identification, sourcing and resolution of stressed financial assets,” Yes Bank said in the notice.

Ernst & Young sought expressions of interest from prospective investors on behalf of the bank.

Those putting in bids or their sponsors must have had minimum assets under management and funds deployed globally of at least $5 billion in the preceding financial year.

They must also have demonstrated ability to commit funds for investment or deployment in Indian companies or assets of approximately $0.5 billion.

Bidders must have global experience in the distressed assets space, and a track record of turning around or resolving non-performing assets (NPAs), apart from satisfying the central bank’s ‘fit and proper’ criteria.

Yes Bank MD & CEO Prashant Kumar declined to comment on the development or to share any further details on Wednesday.

After Yes Bank declared its financial results for Q4FY21, Kumar said that the bank had reached out to the RBI for its approval for the ARC.

While the RBI had not approved the plan for the ARC in the form it was initially envisaged, Yes Bank was continuing to pursue its plan for the company.

“Now we would be waiting for the report of the expert committee which has been set up by the Reserve Bank of India on the entire ARC framework and then we will move according to those guidelines,” Kumar had said.

Kumar had guided that in FY22, Yes Bank’s cash recoveries would be more than its slippages.

In Q1FY22, the lender reported a gross NPA ratio of 15.6%, up from 15.41% in the previous quarter, and a net NPA ratio of 5.78%, down from 5.88%.

Slippages stood at Rs 2,233 crore, while recoveries and upgrades were to the tune of Rs 2,325 crore.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
12021 Bank Holidays October: Banks to remain shut for up to 21 days in October; check full list here
2India needs 4-5 more large banks of SBI’s size: Finance minister Nirmala Sitharaman
3Infrastructure NBFCs: On stable footing amidst a crisis