RBI Approves Japan's SMBC to Establish Wholly-Owned Subsidiary in India

• The Reserve Bank of India (RBI) has granted 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 located in New Delhi, Mumbai, Chennai, and Bengaluru, which will convert into the WOS.
• The WOS structure offers SMBC greater operational flexibility and treatment similar to local banks, including unrestricted branch expansion.
• An Indian subsidiary ring-fences its capital from the parent bank, enhancing financial stability.
• SMBC previously acquired a 24.22% stake in Yes Bank, becoming its largest shareholder, with SBI retaining over 10%.

Why It Matters: RBI approves SMBC's wholly-owned subsidiary in India, enhancing its operational flexibility and market presence.