SMBC Secures RBI Nod to Acquire 24.99% Stake in Yes Bank

The Reserve Bank of India (RBI) has approved a plan by Japanese lender Sumitomo Mitsui Banking Corporation to purchase up to 24.99% of the private sector lender, Yes Bank announced on 23 August. In the biggest cross-border investment in the Indian banking industry, the Japanese lender declared in May that it would pay INR 13,482 crore to acquire a 20% share in Yes Bank.

Additional 4.9% Stake Application

SMBC is a fully-owned subsidiary of Sumitomo Mitsui Financial firm, which as of the end of December had $2 trillion in assets, making it the second-largest banking firm in Japan. Then, according to a July Reuters story, SMBC applied for permission to acquire a further 4.9% of Yes Bank.

SBI’s 13.19% Stake Sale

When and from whom shareholders SMBC will buy the extra shares to increase its ownership in Yes Bank to little less than 25% are not yet known. The largest lender in India, State Bank of India (SBI), would sell 13.19% of its shares under the 20% stake sale plan.

The remaining 6.81% will be sold by seven other shareholders: Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank.

Yes Bank’s Response to RBI Approval

In a regulatory filing, Yes Bank stated that it is happy to notify that, by letter dated August 22, 2025, the Reserve Bank of India (RBI) has given SMBC permission to purchase up to 24.99% of the bank’s paid-up share capital and voting rights. One year from the date of this letter, this approval will remain in effect.

In March 2020, the RBI replaced the board when Yes Bank’s financial situation worsened. Soon after, Yes Bank was saved by a group of banks led by SBI. According to the announcement, RBI has further explained that SMBC will not be considered a bank promoter after the transaction. Yes Bank is currently entirely owned by public shareholders and does not have a promoter.

As stated in the agreements cited in Yes Bank’s notification dated May 9, Yes Bank stated that the proposed transaction is contingent upon clearance from the Competition Commission of India (CCI) and customary preconditions previously.

Strategic Benefits of the Deal for Yes Bank

Prashant Kumar, the CEO of Yes Bank, whose tenure expires in April 2025, told Mint three months ago that the private sector lender has accomplished three major goals thanks to the plan to sell 20% of Yes Bank. The fate of State Bank of India’s (SBI) ownership stake in the bank was one of the bank’s lingering issues, although Kumar said that it had been resolved.

Proxy Advisory Firms Raise Concerns

In the meanwhile, SMBC will receive two seats on the Yes Bank board as part of the agreement. However, proxy consulting companies were not pleased with Yes Bank’s decision to allow the Japanese lender to appoint its nomination directors to important board committees.

On August 15, Mint announced that two proxy advice firms, Stakeholder Empowerment Services (SES) and Institutional Investor Advice Services India Ltd (IiAS), had advised investors to vote against the plan.