Yes Bank plans to set up an Asset Reconstruction Company (ARC) by September jointly with a US-based financial services conglomerate and three public sector banks."We would be launching the ARC by the first half of this fiscal. We will hold a 29.5% stake and the foreign partner will hold 37.5%. Three public-sector banks will hold 11% stake each," Rana Kapoor, managing director and CEO, Yes Bank, said.Kapoor, however, did not elaborate but banking sources said the US partner is likely to be investment banker J P Morgan and domestic PSBs -- Bank of Baroda, Bank of India and Union Bank of India.All the four Indian parties have received an in-principle approval for the ARC while the foreign partner is awaiting approval from the Foreign Investment Promotion Board (FIPB).K R Kamath, executive director, Bank of India confirmed the development, saying his bank had already received Reserve Bank's approval and was presently engaged in completing formalities in this regard."We have received the approval from the central bank and expect to kick-start the venture this fiscal," he said.Yes Bank's ARC is expected to pose a challenge to Asset Reconstruction Company India (ARCIL), the market leader in the segment presently.With three major public sector lenders and a foreign heavyweight as its partners, Yes Bank's ARC has the potential to eat into ARCIL's marketshare.
