The government is set to approve a plan for State Bank of India (SBI) to buy a stake in Yes Bank, according to a leading daily report.
India's biggest lender will most probably be asked to form a consortium for this purpose.
The board of SBI, the country's largest lender, is meeting in Mumbai on Thursday, but it could not be immediately ascertained whether the takeover of Yes Bank is on the agenda.
Yes Bank, which is grappling with bad loans, is looking to raise fresh capital but the plans are facing uncertainties. It has also delayed the announcement of 2019 December 2019 quarter results due to the ongoing crisis.
The bank's capital buffers have come down due to non-performing assets.
Shares of Yes Bank declined Rs 18.05, or 48.98%, to trade at Rs 18.80. The total volume of shares traded was 76,088,628 at the BSE (1.39 p.m., Friday).
Shares of State Bank Of India declined Rs 17.65, or 6.12%, to trade at Rs 270.65. The total volume of shares traded was 2,508,575 at the BSE (1.44 p.m., Friday).