RBI grants in-principle approval to Japan’s SMBC to set up wholly owned subsidiary in India

The Reserve Bank of India on Wednesday granted ‘in-principle’ approval to Japan’s Sumitomo Mitsui Banking Corporation (SMBC) to set up a wholly owned subsidiary in India.

The approval has been given under the Reserve Bank of India (Setting Up of Wholly Owned Subsidiaries by Foreign Banks) Guidelines, 2025, the central bank said in a release.

SMBC currently operates in India in branch mode through four branches located in New Delhi, Mumbai, Chennai and Bengaluru.

The ‘in-principle’ nod allows the bank to establish a wholly owned subsidiary through conversion of its existing branches in the country.

“The RBI would consider granting a licence for commencement of banking business in WOS mode under Section 22 (1) of the Banking Regulation Act, 1949 to SMBC on being satisfied that the bank has complied with the requisite conditions laid down by RBI as part of ‘in-principle’ approval,” the central bank said.

Sumitomo Mitsui Financial Group is the second-largest banking group in Japan, with total assets of $2 trillion as of December 2024, and has a strong global presence.

Last year, SMBC got an approval from the RBI to acquire up to 24.99% of the paid-up share capital of Yes Bank.

Following RBI's approval, Yes Bank saw multiple banks, which held stakes in private lender, sell their shares to SMBC.