New Delhi: Japan’s Sumitomo Mitsui Banking Corporation (SMBC) has been granted in-principle approval to set up a wholly owned subsidiary (WOS) in India by the Reserve Bank of India(RBI). This approval will allow SMBC to convert its four local branches at New Delhi, Mumbai, Chennai and Bengaluru into a locally incorporated, full-fledged subsidiary.
Besides this, SMBC has purchased a controlling stake in Mumbai-based Yes Bank, besides a majority stake in SMBC India Credit Company (Formerly Fullerton India) an NBFC.
SMBC satisfied RBI’s guidelines, and is expected to function as a local subsidiary with its own legal entity, capital base and board of directors. As per regulations, a wholly owned subsidiary can enter into mergers and acquisitions with any private sector bank in India keeping the overall foreign investment limit to 74%. SMBC currently has a 24.21% stake in Yes Bank, while remaining the largest shareholder.
Though it is too early to comment, SMBC may eventually get Yes Bank into its wholly owned subsidiary, as the Japanese financial giant aims to get a slice of India’s burgeoning financial market. The RBI has reportedly relaxed its stringent rules to allow SMBC to buy a stake in Yes Bank, though there were rumours of the company seeking to make Yes Bank its wholly owned subsidiary following the stake purchase in May 2025.
