RBI Grants In-Principle Approval for SMBC to Form Wholly-Owned Subsidiary in India

• The Reserve Bank of India (RBI) has given 'in-principle' approval to Japan's Sumitomo Mitsui Banking Corporation (SMBC) to establish a wholly-owned subsidiary (WOS) in India.
• SMBC currently operates in India through four branches in New Delhi, Mumbai, Chennai, and Bengaluru, which will be converted into the WOS.
• Establishing a WOS will provide SMBC with greater operational freedom, allowing it to open branches without significant restrictions and securing its capital separately.
• The approval is under the RBI's 2025 guidelines for foreign banks establishing WOS in India.
• SMBC previously acquired a 24.22% stake in YES Bank, becoming its largest shareholder, with SBI holding over 10%.

Why It Matters: RBI's approval for SMBC to form a WOS in India grants it greater operational freedom and stability.