Mumbai [Maharashtra, India], January 14 (ANI): The Reserve Bank of India (RBI) has granted ‘in-principle’ approval to Sumitomo Mitsui Banking Corporation (SMBC), Japan, to establish a Wholly Owned Subsidiary (WOS) in India. The approval is in line with the Reserve Bank of India (Setting Up of Wholly Owned Subsidiaries by Foreign Banks) Guidelines, 2025.
SMBC currently operates in India through four branches located in New Delhi, Mumbai, Chennai, and Bengaluru. The ‘in-principle’ approval allows the bank to set up a WOS by converting its existing branches, the RBI stated.
The RBI will consider granting a licence for commencement of banking business in WOS mode under Section 22 (1) of the Banking Regulation Act, 1949, once it is satisfied that SMBC has met all conditions associated with the ‘in-principle’ approval.
Under RBI guidelines, a foreign bank intending to establish a WOS in India must first obtain approval from the regulator or supervisory authority in its home country. The applicant bank must also demonstrate that it is subject to effective and adequate prudential supervision in its home jurisdiction, in accordance with internationally accepted standards, including consolidated supervision of global operations.
In assessing applications for a WOS in India, the RBI considers factors such as the nature of economic and political relations between India and the parent bank’s home country, the extent of reciprocity offered to Indian banks, the financial soundness and ownership structure of the parent bank, its international standing and ranking, credit rating by recognized agencies, global presence, and adequacy of its risk management and internal control systems. (ANI)
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