Yes Bank, a private sector lender in India, said on Thursday that it has received an in-principle approval from capital markets regulator Securities and Exchange Board of India (SEBI) to undertake custodian services. The approval comes after the Reserve Bank of India (RBI) gave permission to the Mumbai-based lender to act as custodian of securities.

Yes Bank said it will establish the framework for the custodian business within 12 months. 

A custodian of services offers services such as trade settlement, safe-keeping, benefit collection, reporting and accounting of capital market transactions to domestic and foreign market participants across asset classes comprising debt, equity and money market instruments.

Rana Kapoor, managing director of Yes Bank, said the new business will "complement" the bank's existing capital market services. He also said the bank will gear up to the new business.

"We intend to build state-of- the-art technology driven infrastructure, integrated with best-in- class human capital to offer the finest quality custodial services to our capital market clients," Kapoor said in a statement.

There are 19 registered custodians of securities, according to the SEBI. They include Axis Bank, HDFC Bank, ICICI Bank, DBS Bank, BNP Paribas, Deutsche Bank AG, Edelweiss Custodial Services, Kotak Mahindra Bank and JPMorgan Chase Bank, N.A., among others. 

The steady growth being witnessed in the size of the custodian business in India and the various changes being made in the capital markets industry augur well for Yes Bank and "makes it an attractive business proposition," according to the bank.

Yes Bank's net profit for the fourth quarter ended March 2016 was Rs. 702 crore, up 27.4 percent, while net interest income rose 27.1 percent to Rs. 1,241 crore. The full year net profit climbed 26.6 percent to Rs. 2,539 crore and net interest income increased 30.9 percent to Rs. 4,567 crore.

Gross non-performing assets (NPAs) and net NPAs stood at 0.76 percent and 0.29 percent, respectively. 

The bank declared 100 percent dividend for the financial year 2015-16.

On Monday, Yes Bank applied to the Foreign Investment Promotion Board (FIPB) seeking approval to enhance total foreign ownership limit to 74 percent, with full fungibility for investments by FIIs/ RFPIs under the PIS. The request has been sent to the Cabinet Committee of Economic Affairs (CCEA) for approval.

Stocks of Yes Bank closed at Rs. 912.30 on the BSE on Thursday.