The Centre has approved a rescue plan in which a consortium led by country’s largest lender State Bank of India will be asked to buy stakes in the cash-starved private lender Yes Bank Ltd, reports on Thursday stated.

As per reports, SBI has been authorised to form a consortium before a bid is made to takeover the sinking bank. Despite attempts, SBI chairman Rajnish Kumar was unavailable for comments.

Following the development, YES Bank scrips as much as 27 per cent 25.77 per cent to hit a high of Rs 37.30 per share. Shares of state-run SBI fell over 5 per cent to mark day’s low, though they recovered soon.

At 2.48 pm SBI share on BSE was up 1.51 per cent at Rs 289.60 a piece and Yes Bank shares were up 22.18 per cent at 35.80 apiece.

Earlier, in January, SBI chairman had suggested that some solution would be found to bail out the private lender.

Reports earlier indicated that the Hinduja Group with private equity firm Cerberus Capital Management LP is seeking to pick up a stake in embattled Yes Bank. However, both Yes Bank and Hinduja Group have not disclosed any information regarding the same.

The fourth-largest private lender had earlier said it has delayed its third-quarter earnings as the bank is reviewing non-binding expressions of interest from four investors.

Meanwhile, the Stock exchange has sought clarification from Yes Bank on the news of Government approving a plan to allow SBI-led consortium to buy stake in the private lender.

The Exchange has sought clarification from Yes Bank on March 5, 2020, with reference to news flashed on Bloomberg dated March 05, 2020 quoting “Government is said to have approved @TheOfficialSBI’s plan to buy stake in @YESBANK, said to ask SBI to form consortium for Yes Bank stake”, Yes Bank said in a filing.

“Reply is awaited”, BSE said.

(With input from agencies)