The Reserve Bank of India (RBI) has granted its approval to Sumitomo Mitsui Banking Corporation (SMBC) to acquire up to 24.99% stake in Yes Bank. This decision, communicated via a letter dated August 22, 2025, allows the Japanese banking giant to become the largest shareholder in the private sector lender, surpassing State Bank of India (SBI). The RBI has clarified that despite this significant shareholding, SMBC will not be classified as a promoter of Yes Bank.
The approval is valid for one year from the date of the RBI's letter. Yes Bank, in its regulatory filing, stated that the approval is subject to compliance with the Banking Regulation Act, 1949, the Foreign Exchange Management Act, 1999, and the RBI's master directions regarding shareholding in banking companies. The deal also requires clearance from the Competition Commission of India (CCI) and fulfillment of customary conditions outlined in the agreements.
The proposed acquisition is structured as a secondary stake purchase. SMBC will acquire 13.19% stake from SBI and an aggregate of 6.81% stake from seven other shareholders: Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank. This transaction was initially announced on May 9, 2025, where SMBC planned to purchase a 20% stake in Yes Bank. Later, SMBC sought approval to increase its stake to 24.99%.
The investment by SMBC is estimated to be around $1.6 billion, making it the largest cross-border M&A transaction in India's financial sector. For SBI, the sale of 13.19% stake to SMBC will yield ₹8,889 crore. Following the transaction, SBI will retain approximately 10.8% stake in Yes Bank. It has been estimated that with a sale price of Rs 21.5 a share, SBI will be earning 115% on its investment. As a result of this acquisition, SMBC will have the right to nominate two directors to Yes Bank's board.
This development follows Yes Bank's near collapse in March 2020, triggered by a scam that surfaced, after which the government intervened. A consortium led by SBI infused capital into the bank as part of an RBI-led rescue plan.
In July 2025, India Ratings and Research upgraded Yes Bank's long-term issuer rating to 'IND AA-' from 'IND A' with a stable outlook, indicating improved profitability, asset quality, and capital position. Furthermore, Yes Bank's shareholders approved the extension of Prashant Kumar's tenure as MD & CEO until April 5, 2026, at the AGM held on August 21, 2025. At the same meeting, shareholders also approved 11 resolutions, encompassing financial statements, appointments, and fundraising plans. For the fiscal year 2024-25, Yes Bank reported a 92.3% increase in net profit to ₹2,406.00 crore, with total assets at ₹4.23 lakh crore and deposits exceeding ₹2.85 lakh crore.
SMBC has steadily expanded its presence in India since opening its first branch in New Delhi in 2012, followed by Mumbai, Chennai, and Gift City. Recently, it also secured RBI approval for a branch in Bengaluru.
