Rabobank divests $213mln stake in Yes Bank

Rabobank sells 11% stake to open bank focusing on agriculture, food, renewable energy and clean technology.

The bank moved a step closer to setting up its banking unit in India as it cut its stake in mid-sized local lender Yes Bank for about $213 million, to meet regulatory requirements.

Rabobank, which has a wholly-owned non-banking finance unit in India, plans to focus on agriculture, food, renewable energy and clean technology sectors as part of its banking foray in India.

Standard Chartered, Credit Suisse  and Citibank are all expanding services in an economy forecast to grow more than 8% this financial year. Goldman Sachs has also applied for a banking licence in India.

"The competitive pressure is unlikely to intensify in the near term, as foreign banks face lot of restrictions for getting branch licences and other approvals," said Vaibhav Agarwal, a sector analyst with Angel Broking.

State Bank of India, the country's largest lender, and private sector rivals ICICI Bank and HDFC Bank are seeing an improvement in asset quality, as strong economic and corporate growth reduces the pace of loan defaults.

View the full story in Reuters.