Yes Bank Surges as RBI Greenlights Japan's SMBC Subsidiary in India

• Yes Bank stock rose 2.75% after RBI approved Sumitomo Mitsui Banking Corporation (SMBC) to convert its Indian branches into a subsidiary.
• This move suggests a potentially larger role for SMBC in Yes Bank, beyond just an equity affiliate, hinting at a significant future play.
• SMBC becomes the fourth foreign bank to adopt the subsidiary model in India, committing to a long-term presence with local tax and decision-making advantages.
• SMBC's 24.99% stake in Yes Bank, combined with its subsidiary approval, sets the stage for a larger strategic involvement.
• Potential complexities include consolidating SMBC's existing Indian entities like SMFG India Credit, which could address Yes Bank's retail issues and potentially avoid an open offer if SMBC increases its stake.

Why It Matters: RBI's approval for SMBC's Indian subsidiary signals a potential major strategic shift for Yes Bank.