RBI Approves SMBC’s Acquisition of 24.99% Stake in Yes Bank


In a significant move for India’s financial landscape, the Reserve Bank of India (RBI) has given the green light to Japan’s Sumitomo Mitsui Banking Corporation (SMBC) to purchase up to 24.99% stake in Yes Bank, making it a major cross-border M&A deal in the banking sector.

The Deal Details

  • Initially announced as a 20% acquisition in May 2025.
  • SMBC later requested approval for an additional 4.9% stake, totaling 24.99%.
  • This revised stake remains below the 25% threshold triggering stricter regulatory rules.

Valuation and Impact

  • The 20% acquisition valued at USD 1.6 billion showcases strong foreign investor confidence in India’s banking sector.
  • The expanded stake enhances Yes Bank’s capital base and gives SMBC a strategic entry into India’s financial market.

RBI’s Decision

  • SMBC will not be designated as a promoter shareholder, easing regulatory obligations.
  • This exemption provides flexibility for Yes Bank’s governance and clarity for foreign investors in Indian banks.

Broader Impact on India’s Banking Sector

  • Highlights India’s appeal as a financial hub for foreign investors.
  • Signifies regulatory openness and strengthens India-Japan financial ties.
  • Opens doors for more global banks to consider partnerships with Indian private sector banks.

Key Takeaways for Competitive Exams:

  • RBI approves SMBC’s acquisition of up to 24.99% stake in Yes Bank, a significant move in India’s banking sector.
  • The deal showcases strong foreign investor confidence in India’s banking industry.
  • SMBC will not be classified as a promoter shareholder, simplifying regulatory processes.
  • This transaction reinforces India’s position as an attractive destination for foreign investments in the banking sector.

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