Two of India's top bankers on Tuesday opined that Kotak Mahindra Bank (KMB) is best suited to acquire smaller and capital-starved rival YES Bank. YES Bank's capital buffers have dipped on accelerated non-performing assets recognition under new chief executive Ravneet Gill earlier this year.

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The private sector lender's capital raising plan is also passing through uncertainties and there are speculations on whether YES Bank is an acquisition bid, which has been denied by its management.

"I think Uday (Kotak) is the best candidate to acquire Yes bank. You need deep pockets, Uday has that,” SBI Chairman Rajnish Kumar said at Times Network's India Economic Conclave in Mumbai. When the same question was posed to third-largest lender Axis Bank's Managing Director and CEO Amitabh Chaudhry, it was answered with the same suggestion. “We (Axis Bank) are a smaller bank. We are trying to ensure that we grow big so that at some stage we can acquire others. So, yes Kotak, they are best suited rather than us,” he said. In the past, both Axis Bank and KMB have been discussed as potential suitors for Yes Bank.

According to some watchers, acquiring a bank can help Uday Kotak reduce the promoter stake in KMB, and help him get closer to the levels mandated by the RBI. The regulator has been dragged to the court by KMB for not accepting an earlier attempt at stake dilution and the same petition is slated to be heard early next year.

However, Rohit Rao, chief communication officer at Kotak Mahindra Group, said: "These are comments made by other bankers and reflect their views, and not ours."

Meanwhile, speaking at the same event, Kotak said there was a need to resist a colonialisation of Indian finance, hinting at share sales to foreign investors.

"I'm looking forward to best in class quality but strong Indian owned and controlled financial sector and while we must attract foreign capital, we must ensure that there is no colonialisation of Indian finance,” Kotak said.

YES Bank had to cut its book size by 7 percent in the September quarter because of the capital constraints and has been looking to finish the capital raising exercise at the earliest. It had first announced it has interest from investors of $3 billion, and a few days later disclosed offers of $2 billion. It wanted to finalise the same at the last board meet on December 10 but could not. YES Bank's share price plummeted to Rs 32 apiece in October as against a high of Rs 400 only a year ago, and has been one of the most volatile scrips on the bourses where the price is governed by frequent news flows and speculation.

(With PTI inputs)

First Published:Dec 17, 2019 3:24 PM IST