Sumitomo Mitsui Banking Corporation (SMBC) is set to approach the Reserve Bank of India (RBI) for a licence to operate a fully owned subsidiary in India, the Economic Times has reported. The move is part of the Japanese conglomerate’s plan is acquire a controlling stake in Yes Bank.
SMBC needs the banking regulator's approval to set up a wholly owned subsidiary in India before State Bank of India (SBI) and other lenders sell their remaining stake of nearly 14 percent to the Japanese conglomerate, the report cited sources as saying.
SMBC, which operates four branches in India, wants to transition to a full-fledged subsidiary model from the branch mode to facilitate the acquisition of the majority stake in Yes Bank, the report added.
The RBI has already given “verbal assurance” to the conglomerate that it would be allowed to retain a majority stake in the Mumbai-based private lender, the report said.
Moneycontrol couldn't independently verify the report.
Recently, the RBI granted in-principle approval to Emirates NBD Bank PJSC, the likely top contender to buy stake in IDBI Bank, for setting up a wholly owned subsidiary in India. In 2019, Singapore-based DBS Group's Indian arm received RBI's licence to operate through the wholly owned subsidiary mode.
On May 9, Yes Bank announced that SMBC would acquire a 20 percent stake from its stakeholders, including SBI and several other Indian banks, which had participated in its reconstruction scheme in 2020, for around Rs 13,480 crore.
The Japanese banking giant is also expected to infuse fresh capital into the private lender, equivalent to an additional 6-7 percent stake.
If the fund infusion materialises, SMBC may be required to make an open offer to Yes Bank shareholders, potentially raising its total stake to as high as 51 percent, which would mark a transformative shift in the bank's ownership and control.
Additionally, Yes Bank on May 28 announced that its Board of Directors will meet on Tuesday, June 3, 2025, to consider a proposal for raising capital through the issuance of equity shares, debt securities, or other eligible financial instruments.
At 11.30 am, the Yes Bank stock was trading at Rs 22.60, more than 5 percent higher from the previous close.
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