Big Update: RBI Clears SMBC’s 24.99% Stake Buy in Yes Bank, CCI Nod Awaited

The Japanese lender gets RBI clearance, but the Competition Commission of India is yet to decide.

What happens when a global bank makes a large move into India’s private banking sector? The question is real with the Yes Bank stake acquisition by Sumitomo Mitsui Banking Corporation (SMBC). 

The Reserve Bank of India (RBI) has cleared SMBC to buy 24.99 percent of Yes Bank shares in August 2025. The deal, however, is incomplete as the Competition Commission of India’s (CCI) approval is still pending. 

RBI Approval For SMBC Yes Bank Deal Signals Shift

The Reserve Bank of India issued its approval letter on 22 August 2025. The letter allowed SMBC, a Japanese banking major, to acquire up to 24.99 percent of Yes Bank’s paid-up share capital and voting rights. 

The nod is valid for one year. It is also subject to compliance with the Banking Regulation Act, the Foreign Exchange Management Act, and the RBI master directions.

A key feature of the letter is that SMBC will not be considered a promoter. This is unusual in Indian banking because large foreign investors often attract promoter duties. By keeping SMBC as a regular shareholder, the RBI has eased obligations linked with promoter status. 

This shows a shift in how India views foreign investors in private banks.
 

The one-year validity is critical. If the transaction is not completed within this period, Yes Bank and SMBC may have to apply again for a fresh approval.

Yes Bank Stake Acquisition By SMBC, And The Sellers Behind The Deal

The proposed deal involves both new foreign ownership and Indian banks reducing their exposure. Yes Bank had announced in May 2025 that the State Bank of India would sell 13.19 percent of its holding.

At the same time, seven private banks also planned to sell a combined 6.81 percent. These were Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank. Together with SBI’s sale, this adds up to 20 percent of the intended 24.99 percent stake.

This transaction will reduce the holdings of the rescue banks that had stepped in during Yes Bank’s crisis in 2020. By selling their shares, these banks are freeing up capital for other operations.

For Yes Bank, the arrival of SMBC brings a strong equity backer and more balanced ownership.

Breakdown of Selling Institutions
 

This share sale brings together one large public bank and several private banks. The step is to bring in more investors, making shares easier to buy and sell, and showing trust in the company’s future growth.

SMBC 24.99 Percent Stake In Yes Bank Carries Financial Weight

The deal value has been estimated at around ₹13,500 crore. Reports in August 2025 placed the share price near ₹21.5. With this purchase, SMBC would become the single largest shareholder of Yes Bank.

Apart from equity, SMBC is set to gain two seats on Yes Bank’s board. Proxy advisory firms raised concerns on this issue earlier in 2025. Some advisors suggested that investors should vote against the director appointments. Despite the objections, the RBI did not stop board representation.

The size of the investment makes it one of the largest cross-border banking transactions in India. It reflects the growing interest of foreign banks in India’s private banking sector. 

The infusion of fresh capital may allow Yes Bank to expand lending, strengthen its digital banking platforms, and compete with larger rivals such as HDFC Bank and ICICI Bank.

Financial Details of the Transaction
 

This deal brings in a large investment at a steady share price, while also giving SMBC a role in decision-making through board seats.

CCI Approval Pending Yes Bank Acquisition, Timeline Matters

Although the RBI approval has been issued, the transaction cannot be closed without clearance from the Competition Commission of India. CCI is responsible for assessing whether a deal could harm market competition.

In this case, the commission will examine if SMBC’s entry into Yes Bank raises any barriers for other banks or reduces customer choice. The process could take between three and six months, based on past precedents.

The one-year approval period given by the RBI adds pressure. Any delay in the CCI process could place the deal in limbo. If approval is not obtained in time, the parties may need to start again.

Pending Clearances and Conditions
 

If approval comes on time, SMBC could complete the purchase within the 2025-26 financial year. This would allow Yes Bank to book the capital inflow and restructure its shareholding.

Conclusion 

Yes Bank has faced a long and difficult journey since its 2020 crisis and rescue. The proposed acquisition by SMBC marks a new phase. The RBI approval for SMBC’s 24.99 percent stake is a turning point for the lender. However, the final step remains the CCI nod.

If the clearance is granted within time, SMBC will complete the purchase in the 2025-26 financial year. This would not only bring Yes Bank fresh capital but also change its ownership structure. It would also mark one of the largest foreign investments in Indian banking history.

The decision by CCI in the coming months will decide whether this plan moves from paper to practice. For investors, employees, and depositors, the wait continues. The entry of SMBC could strengthen Yes Bank’s future, but only if the last regulatory gate opens in time.

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