Yes Bank is looking for investors to create an asset reconstruction company

“EY … invites interested investors to express their interest, with solid financial capacity and with substantial experience in the field of distressed assets, with whom the bank will partner to create an asset reconstruction company (ARC) “, reads the notice.

The potential investor would be the main partner or sponsor of ARC and the bank would act as another important partner or sponsor. Potential investors, including foreign institutional investors, foreign portfolio investors, private equity funds, venture capital funds, domestic and foreign investment institutions, asset management entities, among others , are expected to have minimum assets under management and funds deployed, globally of at least $ 5 billion, he mentioned.

They should also have demonstrated the ability to commit funds for investments in Indian companies or assets of around $ 0.5 billion. That aside, potential investors should have global experience in managing the distressed asset space and a proven track record of distressed asset turnaround and meet ‘fit and proper’ criteria in accordance with the guidelines. Reserve Bank of India (RBI).

Yes, the bank had previously attempted to start an asset rebuilding business, but the proposal was rejected by RBI. Mint had reported on March 15 that the central bank had rejected Yes Bank’s request to create an ARC to host bad loans, citing a conflict of interest. Yes The Bank had requested approval to launch ARC in September and was expected to operationalize within six months of obtaining approval.

In an interview with Reuters on February 10, the bank’s managing director and managing director, Prashant Kumar, said the lender expected to transfer nearly Rs 50,000 crore of bad debts to the CRA.

Compared with January-March, the bank’s gross non-performing assets (NPA) ratio rose 19 basis points (bps) to 15.6% of retail assets. As of June 30, 27.1% of the bank’s business loan portfolio was in arrears. In the June quarter, Yes Bank reported more than quadrupling its profits to Rs207 crore from ??45 crore a year ago due to lower provisions and other robust income.