The Hindu Business Line : Yes Bank plans micro finance arm

Yes Bank is planning to set up a subsidiary for micro finance. It applied to the RBI for permission two months ago, said Mr Somak Ghosh, President, Corporate Finance and Development Banking, Yes Bank.

"We are awaiting permission from RBI. We have proposed to set up the subsidiary as a non-deposit taking and specific activity non-banking financial company. But it depends on what route the RBI tells us to take," he said. The minimum capital requirement for an NBFC is Rs 5 crore.

Yes Bank has tie-ups with about 15 MFIs and its total exposure to them is about Rs 100-125 crore.

The advantages of setting up a separate subsidiary is that the bank can ensure norms for lending and Know Your Customer. "We solve the usual risks associated in working with MFIs. We can control the KYC norms and monitoring and recovery procedures," Mr Ghosh said.

The bank will have a significant majority in the subsidiary and may work with a partner having expertise in micro finance. But this is subject to RBI's approval, he said.

More Stories on : Private Banks | Rural Development

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
True hero of a turnaround

Rupee up on dollar inflow

Credit Suisse sees India's GDP growth at 8.5 pc

ICRA rates IIFCL debt

SEBI chief urges bond market role in infrastructure funding

RBI may extend `when issued' trading to new issuances

UTI Bank plans investment banking arm in London

Yes Bank plans micro finance arm

SBH to raise Rs 550-cr tier-II capital

Bond prices fall on strong selling

`Banks must regularly review SHG linkages'

T-bills auction fully subscribed

Call rates unchanged

Securitisation of debt market stressed

Syndicate Bank staff to join stir