In a recent development, the country’s largest bank, the State Bank of India (SBI) announced that it has decided to sell a large number of its shares in Yes Bank to Japan-based Sumitomo Mitsui Banking Corporation (SMBC) on Friday.

It appears that SBI’s top committee approved the sale of over 413 crore equity shares, which is about 13.19% of Yes Bank’s total shares at Rs 8,889 crore in their meeting.

They are planning to sell these shares at a price of Rs 21.50 each.

This way it would become a total deal worth around Rs 8,889 crore.

Please note here that the sale will only go through after SMBC receives all the necessary approvals from regulators and authorities as mentioned by SBI said in an exchange filing.

Earlier SBI acquired Yes Bank share at the request of the Reserve Bank of India (RBI), had acquired shares at Rs 10 a share in March 2020.

Coming to SMBC, it’s one of Japan’s largest banks, boasts total assets of over ¥249,700 billion ($1.7 trillion).

This bank has ita operations across 39 countries, including 15 in the Asia-Pacific region.

For the unawares, this acquisition is part of SBI’s effort, to bring in a new long-term investor for Yes Bank in collaboration with Citi.

It seems that several domestic institutions—including HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, and LIC—own a combined 11.34% stake in Yes Bank.

These institutions are also expected to reduce their holdings, as per a media report .

In the meantime, the foreign direct investment (FDI) rules cap a single foreign entity’s stake in Indian private banks at 15%, and voting rights at 26%.

RBI seems to have historically made a rare exception when they notably allowed the Fairfax to take a 51% stake in Catholic Syrian Bank in 2018, and DBS to absorb Lakshmi Vilas Bank in 2020.