MC EXCLUSIVE SMBC to meet RBI this week for Yes Bank stake purchase

The sources aware of the developments say work is on a fast track and SMBC is keen to hold controlling majority of 51 percent stake in Yes Bank by the start of FY26.

Japan’s financial conglomerate Sumitomo Mitsui Banking Corporation (SMBC) is expected to meet Reserve Bank of India (RBI) officials this week to formally make an application to acquire a 51 percent stake in Yes Bank. Highly placed sources say the application will be furnished in a day or two after a round of meetings.

“The regulator is aware of the deal talks though the formal application will be made by SMBC in a few days,” said a banker who didn’t want to be named. Reviewing such applications usually take about 90 days and it is estimated that by August or September this year,  regulatory clearances are likely to come through for SMBC to acquire a controlling stake in Yes Bank.

People aware of the developments say SMBC is keen to obtain the majority stake in the Indian private bank by the start of FY26.

“With most of the contentious issues ironed out, including on voting rights, there should not be further hurdles to the deal,” said a senior official, who asked not to be identified.

On May 6, Moneycontrol reported that SMBC was believed to have agreed to cap its voting rights in Yes Bank at 26 percent, while it would hold a controlling 51 percent stake in the it.

SBMC had bought a little over a 13 percent stake from State Bank of India (SBI), which had an ownership of almost 24 percent in Yes Bank. While SBI has indicated a 12-month timeframe to close the deal, Yes Bank’s MD and CEO, Prashant Kumar, has said that SMBC may pick up 20 percent in the bank by the end of September 2025 quarter.

To be sure, SMBC’s deal is expected to be rolled out in three tranches, with the first tranche announced last Friday.

The proposal to the RBI will involve an element of primary capital infusion into Yes Bank, which would bump up the Japanese lender’s stake in India’s sixth largest private bank to 26 percent. It is then expected to roll out an open offer which may see the participation of private equity majors Advent International and Carlyle, which hold 9.2 percent and 6.84 percent, respectively, in Yes Bank. SBI may offload its remaining 10 percent stake in the bank during the open offer. Besides, Life Insurance Corporation of India holds a 3.98 percent stake in Yes Bank. The open offer is expected to take SMBC’s stake in Yes Bank to 51 percent.