The Reserve Bank of India (RBI) on Wednesday granted in-principle approval to Sumitomo Mitsui Banking Corporation (SMBC), Japan, to set up a wholly owned subsidiary (WOS) in India.
SMBC currently operates in India in branch mode through four branches located in New Delhi, Mumbai, Chennai and Bengaluru. The in-principle approval allows the Japanese lender to convert its existing branches in India into a wholly owned subsidiary structure.
The Japanese lender had earlier acquired a stake in YES Bank, marking one of the most significant foreign investments in India’s private banking sector.
The RBI said it would consider granting a licence for commencement of banking business in WOS mode.
Once operational, the WOS structure is expected to provide SMBC greater operational flexibility and closer alignment with India’s regulatory framework for foreign banks.
