RBI Approves SMBC’s Major Stake Purchase in Yes Bank

The Reserve Bank of India (RBI) has approved Sumitomo Mitsui Banking Corporation (SMBC) to acquire up to 24.99% stake in Yes Bank, marking a significant step in the bank’s restructuring journey.

In its letter dated August 22, 2025, RBI granted approval valid for one year. Importantly, the regulator clarified that SMBC will not be classified as a promoter of Yes Bank after the stake acquisition.

Deal Structure and Participants

The stake deal, first announced on May 9, 2025, involves SMBC acquiring 20% through a secondary transaction. This includes 13.19% from State Bank of India (SBI) and 6.81% combined from seven other lenders — Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank.

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Regulatory Framework and Conditions

The approval is subject to compliance with the Banking Regulation Act, 1949, RBI’s Master Directions, the Foreign Exchange Management Act (FEMA), 1999, and other applicable laws. RBI also imposed conditions such as lock-in requirements, with subsequent transactions subject to its decision. The deal still requires clearance from the Competition Commission of India (CCI) before it is completed.

Market Insights

Yes Bank shares closed at ₹19.28 on Friday, down 0.77%, though the stock has gained nearly 8% in the past six months, reflecting improving investor sentiment. Market experts believe RBI’s approval signals confidence in the bank’s stability, even as regulatory hurdles remain before the deal is finalized.

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