SMBC gets RBI’s in-principle Approval to set up Wholly Owned Subsidiary in India

Context:

Japan’s Sumitomo Mitsui Banking Corporation (SMBC) has received in-principle approval from the Reserve Bank of India (RBI) to establish a wholly owned subsidiary (WOS) in India. The approval allows SMBC to convert its existing branch-based operations into a locally incorporated subsidiary, the RBI said in a statement.

What does the approval mean?

• SMBC will transition from a branch model to a wholly owned subsidiary structure
• The subsidiary will be incorporated under Indian law
• This gives the bank:
  • Greater operational flexibility
  • Ability to expand its business footprint
  • Scope to undertake activities with local capital and governance

Current SMBC presence in India

SMBC currently operates through:

• Branches in New Delhi, Mumbai, Chennai and Bengaluru
• One branch at the GIFT City International Financial Services Centre (IFSC) in Gujarat

These branches will be converted into the WOS once final approvals are granted.