New Delhi: The Reserve Bank of India (RBI) has accorded in-principle approval to Sumitomo Mitsui Banking Corporation (SMBC) of Japan to set up a wholly owned subsidiary (WOS) in India, marking a significant step in the foreign lender’s plans to expand its presence in one of its key overseas markets.
SMBC currently operates in India through four branches in New Delhi, Mumbai, Chennai and Bengaluru. The approval allows the bank to establish the WOS by converting its existing branch network into a locally incorporated subsidiary, in line with the RBI’s 2025 guidelines on setting up wholly owned subsidiaries by foreign banks.
The central bank said it would consider granting a banking licence under Section 22(1) of the Banking Regulation Act, 1949, once SMBC complies with the conditions stipulated as part of the in-principle approval.
The move reflects RBI’s broader push to encourage large foreign banks to operate in India through the WOS route, which offers greater operational flexibility while ensuring stronger local supervision and ring-fencing of capital. For banks, the subsidiary structure allows easier expansion of balance sheets and access to local markets compared with the branch model.
SMBC is among Japan’s largest banking groups and has been steadily expanding its footprint in Asia, including India, where it focuses on corporate and investment banking, cross-border financing and support to Japanese companies operating locally.
The RBI’s approval comes at a time when foreign banks are reassessing their India strategies, balancing regulatory requirements with the opportunity to participate more fully in financing the country’s investment and infrastructure push.