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SMBC to set up wholly owned India arm after Yes Bank bet
BENGALURU: India’s central bank has granted in-principle approval to Japan’s Sumitomo Mitsui Banking Corp to set up a wholly owned subsidiary in the country, the regulator said on Wednesday.
SMBC, which last year bought a 24 per cent stake in Yes Bank, has so far operated in India through a branch structure. Converting to a subsidiary will give the lender greater operational flexibility and place it on a footing similar to domestic peers.
A wholly owned subsidiary is a separate legal entity in India, allowing banks to open branches without restriction while ring-fencing capital from the parent.
The approval comes as foreign banks seek deeper roots in India’s fast-growing financial market.
SMBC currently operates in India in branch mode through four offices in New Delhi, Mumbai, Chennai and Bengaluru. The in-principle approval allows the Japanese lender to set up a wholly owned subsidiary by converting its existing branches in the country.