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Japan’s SMBC Receives RBI Approval to Acquire 25% Stake in Yes Bank.

Banking & Finance | Dated: 27 Aug 2025

The Reserve Bank of India (RBI) has recently granted approval to Japan’s Sumitomo Mitsui Banking Corporation (SMBC), a wholly-owned subsidiary of Sumitomo Mitsui Financial Group, Inc. (SMFG), to acquire up to 24.99% paid-up capital and voting rights in Yes Bank Limited, one of India’s leading private sector banks. This acquisition marks one of the largest cross-border investments in the Indian banking sector.

🎯 Key Highlights:

  • - In May 2025, SMBC entered into a definitive agreement to purchase a 20% stake in Yes Bank through a secondary stake purchase valued at around ₹13,483 crore.
  • - This investment reflects SMBC’s long-term commitment to expanding its presence in the Indian financial services sector and comes as one of the largest foreign direct investments in India’s banking industry.
  • - The approved deal by RBI covers the acquisition of a total 24.99% stake, which includes 13.19% purchased directly from the SBI, the largest shareholder in Yes Bank. Additionally, the remaining 6.81% stake will be acquired collectively from seven other major financial institutions, including ICICI Bank Limited, HDFC Bank Limited, Kotak Mahindra Bank Limited (KMBL), Axis Bank Limited, IDFC First Bank Limited, Federal Bank Limited, and Bandhan Bank Limited.

💡 Other Important Facts:

  • (i) As per the Reserve Bank of India’s clarification, the approval granted to SMBC will remain valid for one year. Importantly, the central bank has also specified that SMBC will not be classified as a promoter of Yes Bank, despite holding nearly one-fourth of its stake, which ensures compliance with Indian banking regulatory norms.
  • (ii) The acquisition is subject to regulatory frameworks, including the Banking Regulation Act (BRA), 1949, the RBI’s guidelines on acquisition of bank shares, and the Foreign Exchange Management Act (FEMA), 1999.
  • (iii) This transaction not only strengthens capital inflows into India but also highlights growing global investor confidence in the Indian banking sector’s stability and future growth potential.

📚 Test Your Knowledge:

Recently, the RBI approved Japan’s Sumitomo Mitsui Banking Corporation (SMBC) to acquire up to 24.99% stake in which Indian private sector bank?

Correct Answer: Yes Bank

🚀 Quick Recap:

About Japan

  • Prime minister: Shigeru Ishiba
  • Capital: Tokyo