Indian private sector lender Yes Bank is reportedly in discussions to sell a minority stake to local payments firm Paytm.

According to media reports, Yes Bank co-founder Rana Kapoor may sell his stake in the lender to One97 Communications, owner of Paytm.

Currently, Kapoor and associated entities hold a 9.6% interest in Yes Bank.

The divestment is aimed at improving the lender’s capital position and supporting its growth ambitions.

Yes Bank CEO Ravneet Gill told Reuters in an interview: “We are in fairly advanced level of talks right now.” He did not confirm the name of the investor.

Responding to the reports, Yes Bank called them ‘speculative’.

In a regulatory filing, the bank said: “The Bank in the usual and ordinary course of its business continues to explore various means of raising capital/funds through issuance of securities to diverse set of investors, in order to meet its business/ regulatory requirements, subject to compliance with prescribed procedures and receipt of statutory/ regulatory approvals.”

Yes Bank already received the board nod to raise more capital. Currently, the bank is permitted to raise up to $1.3bn. But it plans to secure an additional $1bn to $1.2bn through a preferential allotment, Reuters added.

Last month, the Mumbai-headquartered lender raised $275m through a qualified institutional placement (QIP) to boost its common equity tier-1 ratio.

Last year, it raised $400m through a syndicated loan facility.