Sumitomo Mitsui Banking Corporation has entered into an agreement to acquire a 20% stake in YES Bank, a bulk of which will come from State Bank of India. One of the largest cross-border deal in India’s banking sector, will see SMBC purchase a 13.19% stake from SBI and a 6.81% from Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank.

This deal will make SMBC the largest single shareholder in YES Bank.

Indian banks had acquired the stake in YES Bank five years back when they bailed it out with a capital infusion of over ₹100 billion. 
SBI will sell 4.13 billion shares of YES Bank to SMBC at ₹21.50 per share. SBI currently holds a 23.97% stake in YES Bank and will continue as a major shareholder with over 10% stake after the sale to SMBC.

The transaction is subject to regulatory approvals from the Reserve Bank of India and the Competition Commission of India. 
SMBC is a wholly-owned subsidiary of Sumitomo Mitsui Financial Group, the second-largest banking group in Japan with assets of $2 trillion as of December 2024. SMBC already has a strong presence in India and operates one of the largest diversified NBFCs in the country through SMFG India Credit Company.

Under current foreign direct investment rules, a single foreign entity can hold up to 15% in an Indian private bank. However, the RBI has made exceptions in the past, such as allowing Fairfax to acquire 51% in Catholic Syrian Bank in 2018 and DBS’s takeover of Lakshmi Vilas Bank in 2020.