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Japan's Sumitomo Mitsui Banking Corporation (SMBC) has received approval from the Reserve Bank of India (RBI) to acquire a significant stake of up to 24.99% in India's Yes Bank. This deal, valued at approximately USD 1.6 billion, represents one of the largest foreign investments in the Indian banking sector. While SMBC can now nominate two directors to the board, the RBI's approval specifies that the Japanese bank will not be treated as a "promoter" of Yes Bank, meaning it will not have control over its day-to-day operations.
In a major development for the Indian banking sector, the Reserve Bank of India has granted its approval to Japan's Sumitomo Mitsui Banking Corporation to acquire a substantial stake in Yes Bank. Advertisement
The agreement allows SMBC to increase its shareholding to a maximum of 24.99%, a move that signifies a strong vote of confidence in the Indian financial market. SMBC had initially entered into a deal in May 2025 to acquire a 20% stake, and the recent approval allows for a higher acquisition, making it the largest foreign investment in an Indian bank till date.
The Japanese bank has already acquired stakes from several entities, including a 13.19% share from the State Bank of India and a 6.81% stake from seven other private banks. The finalization of the deal is still contingent on approval from the Competition Commission of India.
A key condition of the RBI's approval is that while SMBC can nominate two directors to the board, it will not be designated as a "promoter" of Yes Bank. This distinction is crucial as it allows SMBC to influence the bank's strategic direction without having direct control over its management.
The investment comes as Yes Bank has shown strong financial performance, reporting a significant increase in both profit and total income in the first quarter of the fiscal year 2026.
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