YES Bank gets in-principle nod for custodian services

YES Bank has been granted an in-principle approval by Securities and Exchange Board of India (Sebi) for acting as custodian of securities.

YES Bank shall now invest in developing operations, technology and human capital capabilities and seek registration with Sebi as a custodian of securities. As per the in-principle approval, YES Bank shall establish this business within 12 months of this approval.  The approval from Sebi is subsequent to the Reserve Bank of India’s approval granted to YES Bank for the custodian of securities business, the bank said.

‘Custodian of Securities’ is a license granted by Sebi to eligible entities allowing them to offer custodial services to financial market participants including foreign institutional investors (FIIs) and foreign portfolio investors (FPIs).

“Custodial services will complement YES Bank’s existing capital market offerings and enable the bank to play a larger role in channelising domestic and foreign investments into Indian financial markets. We intend to build technology driven infrastructure, integrated with human capital to offer the finest quality custodial services to our capital market clients,” YES Bank managing director and chief executive officer Rana Kapoor said.

“This approval is a reflection of YES Bank’s growing presence in Indian financial markets and increasing market share over the last 12 years. We reiterate our commitment towards providing complete financial products suite for all our customers,” Kapoor added.

The size of the custodial business in India is steadily growing with increasing value of assets under custody as well as newer investor classes such as portfolio management services (PMS) and alternative investment funds (AIF) opting for custody services.

Given the increasing customer base of YES Bank and ability to offer a host of transactional banking and financial market products, adding custodial services to YES Bank’s product suite has strong business potential which makes it an attractive business proposition.