Potential investors in Yes Bank are facing regulatory hurdles, even as the bank is locked in a race against time for capital it badly needs. Sources told CNBC-TV18 that investors like Tilden, JC Flowers, Capital and others have some tough regulatory requirements to comply with.

It is not clear at this point whether RBI will allow foreign ownership beyond 74 percent in Yes Bank, sources said. They added that RBI may also want a lock-in commitment from the investors.

Yes Bank, which is looking to raise as much as $2 billion to shore up its capital base, has approached domestic financial institutions like SBI, Axis Bank, HDFC and Life Insurance Corporation, to name a few. However, the response has been mixed, and some like Axis are clearly not interested, sources said.

Foreign investors had asked for a preferential issue price below that of the SEBI formula, which the regulator was not agreeable to, sources said.

The interested investors are now working on a combination of preferential issue and rights issue to reduce their acquisition price.

Also, investors have asked for a write-down of additional tier-I bonds. But that could turn out to be politically sensitive as the bonds are mostly held by the Life Insurance Corporation and Employee Provident fund Organisation (EPFO).

Some experts say that to prevent Yes Bank from imploding, the Finance Ministry, RBI and SEBI will need to sit down with Yes Bank and work out a solution like in the case of Satyam Computer, which was eventually acquired by Tech Mahindra.

First Published:Mar 3, 2020 2:44 PM IST