The State Bank of India‘s (SBI) proposal to sell its majority stake in Yes Bank has reportedly hit a roadblock, with the Reserve Bank of India (RBI) allegedly rejecting the plan.

What Happened: The RBI is not in favour of SBI selling a majority stake in Yes Bank, according to a report by NDTV Profit. The banking regulator is yet to give a clear “fit and proper” approval, and is reportedly against a foreign buyer acquiring a 51% stake in the bank.

At present, talks between Yes Bank and potential buyers have come to a standstill due to these developments. The potential bidders are said to be negotiating directly with the RBI, but the deadlock persists.

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SBI, which currently holds a 23.99% stake in Yes Bank, has reportedly not yet brought up the stake sale proposal at its board level due to the uncertainty surrounding the timeline of the sale. The bank, along with other lenders, had acquired a significant stake in Yes Bank as part of a rescue plan in March 2020.

SBI was planning to offload its entire 23.99% stake in Yes Bank, four years after it rescued the lender. In August, it was reported that the CEO of Sumitomo Mitsui Banking Corporation (SMBC), Akihiro Fukutome, was expected to visit India to discuss the purchase of a stake in Yes Bank with officials from the RBI and SBI.

Price Action: Shares of Yes Bank were down 1.51% to ₹23.46 on Thursday.

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