Shares of Yes Bank were in focus on May 6, 2025 after reports surfaced that RBI had granted permission to Japan’s banking giant Sumitomo Mitsui Banking Corp to buy controlling stakes in the private lender. However, later Yes Bank’s shares pared initial gains to trade with minor gains over conflicting reports that no such development had taken place
Shares of Yes Bank jumped as much as 9.6 per cent on May 6, 2025 following reports that Japan’s banking giant Sumitomo Mitsui Banking Corp (SMBC) had received a nod from the Reserve Bank of India (RBI) to buy a controlling 51 per cent stake in the private bank.
Following the report by Mint, Yes Bank’s shares saw a sharp surge in early trade today, climbing close to its three-month high. On an intra-day basis, the bank stock jumped to a high of Rs 19.44 per share on the NSE.
However, later CNBC-TV 18 reported that the Japanese banking giant had filed no such application with the RBI for approval. Post this, Yes Bank’s shares pared initial gains and is currently trading around Rs 18.10 with 2.09 per cent gains, as of 12:20 PM.
Meanwhile, the BSE has sought clarification from Yes Bank on the issue.
According to a report in the Economic Times, senior officials from the Japanese bank had held a meeting with officials from the State Bank of India (SBI) in Mumbai. SBI holds around 24 per cent stakes in Yes Bank and has been looking to dilute its stakes.
SBI and other banks had helped rescue Yes Bank in 2020, after the RBI took control of Yes Bank following a liquidity crisis. Other banks such as HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank collectively hold 7.36 per cent stakes in the private bank. Life Insurance Corporation of India (LIC) also holds a 3.98 per cent stake in Yes Bank.
If media reports of SMBC acquiring 51 per cent stake in Yes Bank turns out to be true, it would make it the largest banking sector merger and acquisition deal in India. This is also expected to be the Japanese multinational financial group’s biggest ever deal after its $2 billion acquisition of a 74.9 per cent stake in non-banking finance company (NBFC) Fullerton India Credit in 2021.
As for the claims of RBI giving a nod to SMBC to buy controlling stakes in Yes Bank, the existing foreign direct investment (FDI) norms allows an individual foreign bank to hold only up to 15 per cent stakes in an India-based private bank.
FDI norms also state that total foreign shareholding in domestic private banks cannot exceed 74 per cent. However, the RBI has the authority to permit exemptions on a case-by-case basis. It has done so in the past as well. For instance, Prem Watsa’s Fairfax was allowed to acquire a 51 per cent stake in the troubled Catholic Syrian Bank in 2018 and the Development Bank of Singapore (DBS) was permitted to acquire Lakshmi Vilas Bank in 2020.