Sumitomo Gets RBI Nod To Pick 51% In Yes Bank

SMBC's voting rights to be capped at 26%; deal may value Yes Bank at $1.7 bn

- Gopika Gopakumar & Anirudh Laskar

MUMBAI: Japan's Sumitomo Mitsui Banking Corp. (SMBC) has secured Reserve Bank of India (RBI) go-ahead to acquire 51% in private lender Yes Bank, two people aware of the development said, in a deal that may value the private lender at $1.7 billion.

SMBC will either buy less than 26% in Yes Bank and do a merger through a share swap, or may buy up to 26% and launch an open offer, the people said. Currently, State Bank of India (SBI) and other lenders hold 33% in Yes Bank. SMBC's voting rights in Yes Bank will be capped at 26%. "RBI has given SMBC the go-ahead for acquiring a majority stake and running Yes Bank," one of the two people cited above said on the condition of anonymity. "This happened a few weeks after SBI and other bank shareholders agreed to sell their stakes in Yes Bank to Sumitomo Mitsui. SMBC will buy up to a 51% stake in Yes Bank at the market price. RBI has to keep every existing stakeholder's interest in mind," the person said, adding SMBC may pay in cash for the initial stake purchased.