YES Bank has received in-principle approval from the Securities and Exchange Board of India (SEBI) to offer custodial services to financial market participants. The license of custodial services allows a bank or a financial institution to hold financial securities such as stocks, bonds and gold. YES Bank has already received an approval from Reserve Bank of India (RBI) to become custodian of securities.
The lender has 12 months to establish the business of custodial services by developing its technical, operational and human capital capabilities. It has to also register itself as a custodian of securities with SEBI.
The start of custodial services will complement YES Bank's existing capital market services and enable it to play a larger role in channelising foreign and domestic investments into Indian financial markets.
With its custodial services in place, YES Bank will join the likes of ICICI bank, SBI, Axis Bank and HDFC Bank, which offer similar services to its customers.