On Tuesday, the Private lender Yes Bank said its board approved the sale of stressed loans worth Rs 48,000 crore to JC Flowers Asset Reconstruction after receiving no bids to challenge the Private Equity Company made.

Subsequently, Yes Bank’s Board of Directors (BOD) has approved JC Flowers’ declaration of being the winner of the Swiss Challenge method used for the stressed assets sale. The Swiss Challenge method specifies the highest bid in the first auction round is the base price for the other bidders before the next round.

As per the regulatory norms, the entity that makes the highest bid in the second auction round is given the asset. Thus, following the sign of the binding term sheet given by Yes Bank with JC Flowers ARC LLC and JC Flowers ARC collaborating on a strategic partnership related to the stressed loan sale portfolio, the lender’s board also approved the investment that is needed to buy up to 19.99% equity stake in the private equity firm. The purchase could be made in either single or multiple tranches, subjecting to regulatory approval.

In the first quarter of the FY22, Yes Bank reported an improvement in its asset quality, with gross Non-Performing assets (NPAs) falling to 13.45% of gross advances as of June 30, 2022, from 15.60% by late June 2021. The net NPAs or bad loans rose to 4.17% from 5.78%.

Yes Bank said to the media that RBI had approved the appointment of Former RBI Deputy Governor Rama Subramaniam Gandhi as Non-executive or part-time Chairman of the bank for three years, effective from Tuesday. Deputy Governor Gandhi, with the RBI from 2014 to 2017, is presently serving as an independent director on the Boards of financial sector entities.