Sumitomo Mitsui Banking Corporation (SMBC) received in-principle approval from the Reserve Bank of India (RBI) on Wednesday to set up a wholly owned subsidiary (WOS) in India. The approval allows the Japanese lender to convert its existing branch operations in the country into a locally incorporated entity.
The RBI confirmed the decision in an official statement, saying the approval has been granted for establishing the subsidiary through the conversion of SMBC’s current branches in India. “The in-principle approval has been granted to the bank for setting up a wholly owned subsidiary through the conversion of its existing branches in India”, RBI stated.
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Earlier report flagged plans for restructuring
As per a report by The Economic Times, SMBC was preparing to approach the RBI for permission to restructure its India operations into a wholly owned subsidiary. The report had indicated that such a transition would provide the lender greater operational flexibility and allow it to deepen its presence in the country.
According to the report, once approval was secured, domestic lenders, including State Bank of India (SBI), were expected to consider selling their remaining combined stake of nearly 14 per cent in Yes Bank to SMBC. This would potentially pave the way for the Japanese bank to become a majority shareholder. Yes Bank, however, has publicly denied that any such plan is currently under consideration.
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SMBC’s stake in Yes Bank
At present, SMBC holds close to a 25 per cent stake in Yes Bank, most of which was acquired in May 2025. The earlier report noted that a shift from a branch-led model to a subsidiary structure would make it easier for SMBC to increase its shareholding, subject to regulatory approvals.
SMBC currently operates four branches in India, located in New Delhi, Mumbai, Chennai and Bengaluru. In addition, it has a presence at the International Financial Services Centre (IFSC) in GIFT City, Gujarat.
