According to sources, a team of YES Bank is visiting London in this connection.

When contacted, Yes Bank spokesperson declined to comment on the issue.

Last year, HSBC aborted the deal to buy the retail and commercial banking business of RBS on valuation issues.

More than two years ago in July 2010, RBS had announced sale of its retail and commercial banking business in India, estimated to be worth USD 1.8 billion (about Rs 8,500 crore) at that time, at a premium to rival British bank HSBC.

The deal was part of RBS' plans to exit from some of the businesses outside its home country, although the bank was looking to retain its wholesale and investment banking businesses in India even after this sale.

RBS's Indian unit has 31 branches with 4 lakh customers generated revenue of 42 million pound. Total assets of the RBS stood at 190 million British pounds as on September 30, 2012.

However, these businesses account for only 0.5 per cent of the group's remaining non-core assets worth over 65 billion British pounds.

YES Bank recorded a 32.2 per cent rise in its net profit at Rs 596.2 crore during the first half ended September 2012 compared to Rs 451.1 crore in a same period a year ago.

Advances witnessed a 22.9 per cent growth at Rs 42,019.3 crore, while deposits jumped 18.6 per cent to Rs 52,290.8 crore in the first half.

The bank had a capital adequacy ratio of 17.5 per cent by the end of September with a tier-I capital of 9.5 per cent.

Yes Bank in talks to buy RBS's Indian unit

(Reuters) Yes Bank Ltd is in talks to buy the local retail and commercial operations of Royal Bank of Scotland Group Plc (RBS), a source with direct knowledge of the matter said.

A plan by RBS, majority owned by the UK government, to sell the Indian businesses to HSBC Holdings Plc fell through in November last year, more than two years after the two banks started negotiations.

Yes Bank, India's No. 4 private sector lender with assets of nearly $11 billion, is likely to start due diligence on the RBS unit soon, said the source, declining to be named as he was not authorised to speak to the media.

RBS, which is expected to be fined for its role in a global interest-rate rigging scandal later in January, is selling off unwanted assets to strengthen its capital position.

The bank is scaling back its international operations following a bailout during the 2008 financial crisis which left it 81 percent owned by the government. Britain's Finance Minister George Osborne has ordered it to focus on domestic activities.

The bank has shrunk its balance sheet by 700 billion pounds since its rescue and is continuing to sell off unwanted assets as it looks to meet tougher demands on capital requirements being set by the Bank of England's Financial Policy Committee.

RBS has been shrinking its Indian business since the original deal with HSBC was struck in 2010 and it now has assets of just 190 million pounds ($306 million).

The unit has 31 branches, 400,000 customers and made revenue of 42 million pounds in the first nine months of last year, RBS said in a statement last November.

A Yes Bank spokesman declined to comment. RBS said the bank was reviewing all options for its retail and commercial businesses in India.

The Economic Times newspaper earlier reported that Yes Bank and domestic rival IndusInd Bank Ltd, headed by Ramesh Sobti, former India chief of Dutch Bank ABN AMRO, are in talks to buy RBS' India retail assets.

However, IndusInd Chief Operating Officer Paul Abraham told Reuters the bank was not pursuing RBS's Indian assets.

"No, we are not interested," Abraham said, when asked whether the bank was in talks for the RBS assets.

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