Major Japanese Bank Seeks Big Stake in Yes Bank

Japan's Sumitomo Mitsui Banking Corporation (SMBC) is looking to make a huge investment in India's banking sector. They have asked the Competition Commission of India (CCI) for permission to buy a 20% share in India's private lender, Yes Bank. 

This deal, if approved, would be worth a massive Rs 13,483 crore, making it the biggest foreign investment ever in an Indian bank.

Why Does This Deal Matter?

This proposed investment comes after an agreement between SMBC and a group of eight Indian banks, led by State Bank of India (SBI). These Indian banks had invested in Yes Bank back in March 2020 as part of a rescue plan, known as the Yes Bank reconstruction scheme, to stabilise the bank during a period of financial distress. Now, they are looking to sell off some of their shares.

SBI, the largest public sector bank in India, will sell 13.19% of its stake for ₹8,889 crore. The remaining 6.81% will be sold by seven other big Indian banks, including ICICI Bank, HDFC Bank, Kotak Mahindra Bank, and Axis Bank.

About SMBC

SMBC is a fully owned part of Sumitomo Mitsui Financial Group, Inc. (SMFG), which is the second-largest banking group in Japan with huge assets globally. If this deal goes through, SMBC will become the single largest shareholder in Yes Bank.

Yes Bank Deal Now Awaiting Approval From CCI

SMBC has already submitted its request to the Competition Commission of India (CCI), stating that the deal will not harm competition in the market. The CCI is India's main body responsible for promoting fair competition and preventing practices that negatively affect it. SMBC has provided details on how their business activities might overlap with Yes Bank's across various services like lending, digital payments, and more.

Read more: Karnataka Housing Scam: PMAY – Beneficiaries Left to Build Their Own Homes

Conclusion

This potential acquisition by SMBC is a significant development for Yes Bank and the Indian banking sector. It not only provides a partial exit for the Indian banks that supported Yes Bank during its reconstruction but also signals strong international confidence in India's financial market. The deal, if approved by the CCI, will mark a new chapter for Yes Bank with a strong global partner.

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