Japan’s Sumitomo Mitsui Gets RBI Nod for Rs13,500 Crore Investment in Yes Bank

Moneylife Digital Team 25 August 2025

Investor Interest

Reserve Bank of India (RBI) has approved the application of Japanese banking major Sumitomo Mitsui Banking Corporation (SMBC) to acquire up to 24.99% shareholding in Yes Bank, marking one of the biggest foreign investments in an Indian private lender in recent years.

According to Yes Bank’s regulatory filing, RBI’s approval, conveyed through a letter on 22 August 2025, is valid for one year. The central bank has also clarified that SMBC will not be treated as a promoter of Yes Bank following the acquisition.

Yes Bank had previously informed exchanges on 9 May 2025, about a proposed transaction where SMBC would acquire a 20% stake through a secondary sale. Of this, 13.19% will come from State Bank of India (SBI), while the remaining 6.81% will be divested collectively by Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank.

The total deal size is estimated at Rs13,500 crore, based on a sale price of Rs21.5 per share. SMBC will also have the right to appoint two nominees on Yes Bank’s board. The Japanese lender has now received RBI approval to scale its stake further to 24.99%, subject to regulatory conditions.

Yes Bank says the approval is contingent on compliance with the Banking Regulation Act, 1949, Foreign Exchange Management Act, 1999, RBI’s master directions on bank shareholding norms, and other applicable laws. Any further share transactions, including increases beyond the proposed 20%, will remain subject to RBI’s scrutiny and conditions such as lock-in requirements.

The proposed transaction is still subject to clearance from the competition commission of India (CCI) and fulfilment of customary conditions precedent outlined in the agreements signed earlier this year.

This deal comes against the backdrop of Yes Bank’s turbulent history. In March 2020, RBI had superseded the Bank’s board and a consortium of lenders led by SBI had bailed it out to prevent a collapse. Since then, the Bank has been working to strengthen its capital base, clean up its balance sheet, and rebuild investor confidence.

With SMBC’s entry, Yes Bank will not only gain from a significant capital infusion but also from the strategic expertise of one of Japan’s largest financial institutions, potentially boosting its competitiveness in corporate and retail banking segments.

SMBC is a wholly-owned subsidiary of Sumitomo Mitsui Financial Group (SMFG), Japan’s second-largest banking group with global assets totalling about US$2trn (trillion). SMFG is publicly listed in Japan and the US and enjoys a robust investment-grade credit rating, including A1 by Moody’s and A- by S&P.

SMBC already maintains a strong presence in India through its banking operations and its non-banking finance company (NBFC) arm, SMFG India Credit Company Ltd.

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