The banking regulator, Reserve Bank of India (RBI), has approved Yes Bank's proposal of setting up a broking business. The private sector lender, Yes Bank, is now gearing up to launch a broking business, Yes Securities Private Ltd., which will be set up with an initial capital of Rs. 20 crore to Rs. 25 crore.
The broking arm will be set up as a subsidiary of Yes Bank, and it will act as a complementary business to the bank's retail liabilities and wealth management segment. Mr. Rana Kapoor, the MD and CEO of Yes Bank said that the new business is expected to bring about granularity in the Current and Savings Accounts segment (CASA) with a focus on retail broking. The bank aims to hike its CASA base to 20 percent by the end of the current year. At present, its CASA segment valuation stands at 16.2 percent (as on June 2012).
In India, there are many banks which have a presence in the broking segment, like ICICI Bank, Axis Bank and HDFC Bank. These private sector banks have a substantial market share. But, with the economy going downward, the profitability margins of these broking houses have also been affected.