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Indian private lender Yes Bank said on Monday it completed the transfer of bad loans worth 480 billion rupees ($5.81 billion) to private equity firm J.C. Flowers, in a deal aimed at cleaning up its balance sheet.

The deal, the largest sale of bad loans in the Indian banking sector yet, comes more than two years after the central bank stepped in to take control of the lender after a dramatic rise in toxic assets alarmed investors and depositors.

The lender's stock has shown signs of a recovery after being driven down sharply over the last two years, although it remains a fraction of its 2018 peak of 404 rupees. It is up about 56% so far this year, last trading at 21.4 rupees.

"This transaction would further strengthen our balance sheet, allowing the bank to focus fully on growth and profitability as future strategic objectives," Yes Bank Chief Executive Prashant Kumar said in a statement.

Yes Bank's gross bad loan ratio edged down to 12.89% at the end of the September quarter from 13.45% at the end of June. The number had risen to 18.87% as of December 2019.

Last week, Yes Bank also concluded allotting shares and share warrants worth $1.1 billion to private equity firms Carlyle and Advent International, in its bid to boost its capital and fund growth.

Yes Bank CEO said in August the lender was looking to increase its loan book by 15% in the fiscal year ending March 2023 as it sharpens its focus on mortgages, vehicle loans and small and mid-sized business loans.