The central bank has given conditional approval to US private equity firms Carlyle Group Inc and Advent International for their purchase of a combined 20% stake in Yes Bank, the private-sector lender said on Thursday.
"The investors are evaluating the conditions," Mumbai-based Yes Bank said, adding that the bank and the investors will engage with the Reserve Bank of India to seek an early resolution of the conditions and get final approval.
It was not immediately clear what the conditions were.
Carlyle, Advent, Yes Bank and the RBI did not immediately respond to Reuters' emailed requests for comment.
Yes Bank had, in July, said it would raise $1.1 billion from Carlyle and Advent for a 10% stake each in the bank, as it looked to boost its capital and fund growth.
The funds were to be raised by issuing shares worth $640 million and share warrants worth $475 million.
The proposed sale to the private equity firms came two years after the RBI stepped in to take control of the bank after a dramatic rise in toxic assets alarmed investors and depositors, posing a systemic risk to India's banking sector.
In September, Yes Bank approved the transfer of stressed assets worth 480 billion rupees ($5.91 billion) to private equity firm J.C. Flowers in an attempt to clean up its balance sheet.