The Netherlands-based Rabobank moved a step closer to setting up its own banking operation in India as it cut its stake in mid-sized local lender Yes Bank for about $213 million (Rs973 crore) to meet regulatory requirements.

Rabobank, which has a wholly-owned non-banking finance unit in India, Rabo Finance India, plans to focus on agriculture, food, renewable energy and clean technology sectors as part of its banking foray in India.

Standard Chartered Credit Suisse and Citibank are all expanding services in an economy forecast to grow more than 8 per cent this financial year. Goldman Sachs has also applied for a banking licence in India.

"Rabobank, as a part of its overall business plan for India, is obliged under the regulations to reduce its shareholding in Yes Bank pending approval of its application for a full banking licence in India," it said in a statement. It has thus reduced its stake in Yes Bank from around 15.9 per cent to 4.9 per cent, it said.

Rabobank, which held nearly 16 per cent in Yes Bank before the deal, sold 37.3 million shares to a group of domestic and foreign institutional investors. It retained a 4.9-per cent stake in the Indian bank.

The deal was struck at Rs263 a share, raising Rs973 crore. The sale price represents a discount of 6.6 per cent to Yes Bank's close of Rs281.70 on Monday. Citibank was the sole adviser to the deal.

Rabobank leveraged its dominant position among Dutch farmers to become the biggest bank in the Netherlands. Its overseas operations include a banking operation in California's Central Valley, one of the world's key farming areas.

Rabobank is now boosting its focus on Asia, with its plan to invest up to $200 million in the Agricultural Bank of China as part of a cooperation deal between the banks.

Rabobank, as a part of its overall business plan for India, is obliged under the regulations to reduce its shareholding in Yes Bank pending approval of its application for a full banking licence in India, it said.

As per Indian banking regulations, a foreign bank that holds a stake in a domestic bank cannot simultaneously have independent operations.

Commenting on the development, member of the Executive Board of Rabobank Sipko Schat said, "We remain confident in the future prospects of Yes Bank and are retaining a 4.9 per cent stake in the bank."

He said, "We are a strong supporter of Yes Bank and its entrepreneurial management team, who have successfully established the bank as one of India's most successful and fastest-growing full-service providers."

Rabobank is keen to participate and contribute to India's further growth in these and other sustainable sectors including renewable energy and clean technology, he said. To this end Rabobank is keen to establish its own banking presence in India and has sought the necessary regulatory approvals.

In line with the reduction in their shareholding, Sipko Schat will step down from the board of Yes Bank, the statement said.

Set up in 2004, Yes Bank has about 150 branches across the country and plans to open another 100 in the future.

Rabobank has been present in India for over 12 years and currently has a wholly owned non-bank finance subsidiary Rabo India Finance.