YES BANK, India’s 4th largest private sector Bank, said it has received approval from Securities and Exchange Board of India (SEBI) for acting as Custodian of Securities, allowing it to act as an intermediary for foreign institutional investors or FIIs.
“The Custody business will allow the Bank to comprehensively service the Foreign Portfolio Investors (FPis), Alternative Investment Funds (AIFs) and Portfolio Management Service (PMS) firms, as more and more investors look to participate in this exponential growth phase of our country,” it said.
It is estimated that about 70% of India’s stock market is controlled by foreign entities.
Foreign investors typically operate through custodian banks that keep their shares and engage in transactions on their behalf. This is done both for convenience as well as to comply with local rules more easily.
The license will allow YES Bank, which is the most aggressive among private banks in terms of offering cost-efficient solutions to institutional clients, to tap into a large market of foreign investors.
With the license, YES Bank can manage portfolios of Foreign Institutional Investors (FIls) and Foreign Portfolio Investors (FPIs), such as private equity funds, pensiion funds, foreign brokers and other entities.
It said it is already providing banking services to more than 25 FPIs.
“The Bank firmly believes its cost-efficient approach with a focus on superior customer service standards will be a key differentiator for its Custody Services,” it added.
Rana Kapoor, Managing Director & CEO of YES BANK said the new service will round out bank’s existing capital market offerings and “enable the Bank to play a larger role in channelizing domestic and foreign investments into Indian Financial Markets.”
He said the bank has already put in place a state-of-the-art technology driven infrastructure and a select team to cater to such clients.
Unlike private banks like ICICI Bank and Axis Bank, YES Bank focuses almost exclusively on institutional clients, including corporate clients.
The Bank has a representative office in Abu Dhabi and will also be opening Representative offices in London and Singapore soon, it added.