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India’s largest government-owned bank, State Bank of India (SBI), has announced a big move involving private lender YES Bank. On May 9, 2025, SBI said it will sell part of its shares in YES Bank to Sumitomo Mitsui Banking Corporation (SMBC), a major bank based in Japan.
SBI currently owns nearly 24% of YES Bank. It now plans to sell a part of its holding — about 13.19%, which equals to more than 413 crore shares — to SMBC at the price of ₹21.50 per share.
Share of SBI in YES Bank
| Shareholder | Percentage |
|---|---|
| State Bank of India | 23.99% |
| Verventa Holdings (Advent) | 9.2% |
| CA Basque Investments (Carlyle) | 6.84% |
| Life Insurance Corporation of India | 3.96% |
| HDFC Bank | 2.75% |
| ICICI Bank | 2.39% |
| Kotak Mahindra Bank | 1.21% |
| Axis Bank | 1.01% |
This sale will bring in around ₹8,889 crore for SBI. This amount is subject to approval from financial regulators and other legal formalities. Details of the Transactions are as follows:
- Number of shares being sold: 4,13,44,04,897 equity shares
- Selling price per share: ₹21.50
- Total value of the deal: ₹8,888.97 crore
- Expected completion: Within one year, after necessary approvals
- SBI’s new stake after sale: Will come down to 10.78%
About SMBC?
Sumitomo Mitsui Banking Corporation (SMBC) is one of the largest banks in Japan. According to earlier reports, SMBC has received approval from the Reserve Bank of India (RBI) to acquire a larger stake in YES Bank — possibly up to 51%. They might:
- Buy up to 26% and then launch a public offer to increase their shareholding, or
- Go for a merger using a share swap (trading shares instead of money).
Background of YES Bank Failure
Yes Bank, once a prominent private sector bank in India, faced a significant financial crisis in early 2020. The bank grappled with mounting non-performing assets (NPAs), inadequate capital buffers, and governance issues, leading to a severe erosion of depositor and investor confidence. In response, the Reserve Bank of India (RBI) intervened in March 2020, imposing a 30-day moratorium that restricted withdrawals to ₹50,000 per account and superseded the bank’s board.
To stabilize the situation, the RBI formulated a reconstruction scheme. Under this plan, the State Bank of India (SBI) led a consortium of investors—including HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank—to infuse capital into Yes Bank. SBI alone committed ₹7,250 crore, acquiring a 48.2% stake in the bank. This collective effort aimed to restore depositor confidence and ensure the continuity of banking operations.
Over time, as Yes Bank’s financial health improved, SBI began reducing its stake. By March 2025, SBI’s holding had decreased to approximately 24%. In a strategic move to further divest, SBI announced plans to sell a 13.19% stake in Yes Bank to Japan’s Sumitomo Mitsui Banking Corporation (SMBC) for ₹8,889 crore, pricing the shares at ₹21.50 each. This transaction is part of a broader initiative by SMBC to acquire up to a 51% stake in Yes Bank, pending regulatory approvals.
The potential acquisition by SMBC signifies a new chapter for Yes Bank, introducing international expertise and capital. For SBI, this divestment aligns with its objective to reallocate resources and focus on core operations. The evolving ownership structure reflects the dynamic nature of the banking sector and the importance of strategic partnerships in ensuring financial stability.
