May 6, 2025
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Japan’s SMBC Gets RBI Nod to Acquire Majority Stake in Yes Bank
Japan’s Sumitomo Mitsui Banking Corporation (SMBC) has received approval from the Reserve Bank of India (RBI) to acquire a majority stake in private sector lender Yes Bank, according to two individuals familiar with the matter. The deal, which could value Yes Bank at approximately $1.7 billion, marks a significant shift in the ownership of India’s sixth-largest private bank.
SMBC plans to acquire up to 51% of Yes Bank, potentially in phases. Initially, it may purchase less than 26% of the bank through a cash deal or share swap, followed by a possible open offer to increase its stake. However, the RBI has capped SMBC’s voting rights at 26%, in line with regulatory guidelines.
“RBI has cleared the proposal for SMBC to acquire a majority interest and take operational control of Yes Bank,” one of the individuals said on condition of anonymity. “This follows an agreement by State Bank of India (SBI) and other bank shareholders to divest their stakes to SMBC.”
Currently, SBI and a consortium of Indian lenders collectively hold a 33% stake in Yes Bank. The transaction will allow them an exit from the bank, which they helped rescue during its financial crisis five years ago.
Along with SBI, existing shareholders such as Axis Bank, Kotak Mahindra Bank, and HDFC Bank are expected to offload part of their holdings to SMBC in the initial phase, with further stake sales planned over time. SMBC is reportedly advised by JPMorgan on the financial front and J Sagar Associates on legal matters.
While SMBC has not issued a public statement, and RBI and the other involved banks have not responded to media queries, the development signals a new chapter for Yes Bank, bringing in a foreign strategic investor capable of driving long-term growth and competitiveness.
Other global banks, including Japan’s Mizuho Bank and Emirates NBD, had also expressed interest in acquiring Yes Bank. In parallel, the RBI is encouraging SMBC to establish a wholly owned subsidiary in India—a move aimed at safeguarding local operations from global financial risks and enhancing regulatory oversight.
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