In a significant development for India's banking sector, the Reserve Bank of India (RBI) has given its approval for Sumitomo Mitsui Banking Corporation (SMBC) to acquire up to a 24.99% stake in Yes Bank . This move marks a substantial foreign investment in one of India's private sector banks.

Key Points of the Approval

• Acquisition Limit: SMBC has been authorized to acquire up to 24.99% stake in Yes Bank.
• Regulatory Clarification: The RBI has explicitly stated that despite the significant shareholding, SMBC will not be classified as a promoter of Yes Bank.

Implications for Yes Bank

This approval from the RBI could potentially bring several benefits to Yes Bank:

1. Capital Infusion: The acquisition may lead to a substantial capital inflow for Yes Bank, potentially strengthening its financial position.
2. Global Expertise: SMBC's involvement could bring international banking expertise and best practices to Yes Bank's operations.
3. Investor Confidence: The interest from a major global bank like SMBC might boost investor confidence in Yes Bank.

About SMBC

Sumitomo Mitsui Banking Corporation is a major Japanese bank and one of the largest in the world. Its interest in acquiring a significant stake in Yes Bank underscores the potential it sees in the Indian banking sector.

Regulatory Stance

The RBI's decision to allow such a substantial stake acquisition while clarifying that SMBC won't be considered a promoter is noteworthy. This approach may indicate the regulator's balanced view on foreign investments in Indian banks - welcoming capital and expertise while maintaining clear distinctions in control and management.

As this story develops, stakeholders will be keenly watching how this acquisition unfolds and its impact on Yes Bank's future strategies and performance in the competitive Indian banking landscape.

In a significant development for India's banking sector, the Reserve Bank of India (RBI) has given its approval for Sumitomo Mitsui Banking Corporation (SMBC) to acquire up to a 24.99% stake in Yes Bank . This move marks a substantial foreign investment in one of India's private sector banks, potentially reshaping its ownership structure.

Key Highlights of the Approval

• The RBI has granted SMBC permission to acquire up to 24.99% of Yes Bank's paid-up share capital or voting rights.
• Despite the significant shareholding, SMBC will not be designated as a promoter of Yes Bank.
• The approval is valid for one year from August 22, 2025, as per the RBI's letter.

Transaction Details

The approved stake acquisition is part of a larger transaction that Yes Bank had previously disclosed to the stock exchanges on May 9, 2025. The proposed deal includes:

• A secondary stake purchase of 13.19% from the State Bank of India
• An additional 6.81% stake acquisition from seven other shareholders, including Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank

Regulatory Conditions

The RBI's approval comes with several conditions:

• Compliance with relevant provisions of the Banking Regulation Act, 1949
• Adherence to RBI's Master Direction and Guidelines on Acquisition and Holding of Shares or Voting Rights in Banking Companies
• Compliance with the Foreign Exchange Management Act, 1999
• Other applicable laws and terms, including lock-in periods

Next Steps

While the RBI's approval is a crucial milestone, the transaction still faces some hurdles:

• Approval from the Competition Commission of India (CCI) is pending
• Customary conditions precedent as mentioned in the agreements need to be fulfilled

Implications for Yes Bank

This approval paves the way for a significant capital infusion into Yes Bank, potentially strengthening its financial position. The involvement of SMBC, a major global banking player, could bring international expertise and potentially enhance Yes Bank's operational capabilities.

However, it's important to note that despite the substantial stake, SMBC will not have promoter status, which could have implications for the bank's governance structure.

Yes Bank has stated that it will host the information regarding this approval on its website, www.yesbank.in , in compliance with SEBI regulations.

As this development unfolds, it will be closely watched by investors, regulators, and the broader banking industry for its potential impact on Yes Bank's future trajectory and the evolving landscape of India's banking sector.