Calcutta, July 11: German investment and development company DEG, a wholly-owned subsidiary of KfW BankenGruppe, is eyeing a minority stake in Yes Bank.

“We are looking at a 5 per cent stake as a foreign bank cannot hold more than that in an Indian bank according to the RBI stipulations,” said a DEG official in KfW India, the representative office of the German banking group.

“Price negotiations are currently on and the deal is expected to be finalised in a couple of months,” he added.

It will be a strategic tie-up where DEG will help the Indian bank improve its businesses and efficiency.

“The bank has a retail focus and we will extend our expertise in identifying the right business area,” he said.

“Nothing has materialised till now. In fact, talks are going on with several other entities. Since we have a healthy capital adequacy ratio, we don’t urgently require any investment,” said a senior official of Yes Bank on conditions of anonymity.

In April last, KfW BankenGruppe had announced its business plans in India. The German bank was keen to increase its lending exposure to 3 billion euros from 1 billion euros at present. The group also evinced its interests in providing long-term funding to aviation and other infrastructure projects in the country either directly or through partnerships.

Meanwhile, KfW IPEX Bank, the German group’s another subsidiary, today signed a memorandum of understanding with city-based Srei Infrastructure Finance Ltd for providing $25 million long-term loans (on a cash-flow basis) for infrastructure projects.

“This will be a seven-year loan to Srei,” said Christian K. Murach, member of the board of managing directors, KfW IPEX Bank.

“We are also talking to other private enterprises for similar arrangements. Though our focus has been on infrastructure, we are looking for opportunities in manufacturing, shipping, power and telecom,” he added.

The state-owned bank from Germany has already invested in the equity capital of two infrastructure funds floated by IDFC and IL&FS.