In a landmark deal in India’s banking sector, Japan’s Sumitomo Mitsui Banking Corporation (SMBC) is set to acquire a 20% stake in YES Bank for Rs 13,483 crore — marking the largest-ever cross-border investment in Indian banking. SMBC will acquire the stake through secondary share purchases, buying 13.19% from SBI for Rs 8,889 crore, and the rest from seven other major Indian banks.
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This comes just four years after YES Bank was on the verge of collapse. Back in March 2020, the Reserve Bank of India imposed a moratorium, restricted withdrawals to Rs 50,000, and superseded its board due to financial instability, governance issues, and inability to raise capital. The RBI’s reconstruction plan brought in SBI and other banks as rescue investors. SBI will continue to hold over 10% even after the deal.
The deal is a big win for YES Bank, which has since rebuilt under the leadership of Prashant Kumar, formerly of SBI, who was appointed as MD & CEO after the crisis. YES Bank now has a deposit base of Rs 2.84 lakh crore and reported a net profit of Rs 612 crore in Dec 2024.
SMBC, a subsidiary of Japan’s second-largest banking group SMFG with $2 trillion in assets, is no stranger to India. Its NBFC arm — SMFG India Credit — is already a major player. With this investment, SMBC aims to expand in one of the fastest-growing economies and sees YES Bank as a long-term growth partner.
This marks a dramatic turnaround for a bank once rocked by bad loans and risky exposures flagged as early as 2015. With SMBC on board, YES Bank may finally be poised to reclaim its lost glory and drive a new era of stability, profitability, and governance.
