Mumbai (Maharashtra) [India], January 14 (ANI): The Reserve Bank of India (RBI) has granted ‘in-principle’ approval to Sumitomo Mitsui Banking Corporation (SMBC), Japan for establishing a Wholly Owned Subsidiary (WOS) in India.
The approval comes below the Reserve Bank of India (Setting Up of Wholly Owned Subsidiaries by Foreign Banks) Guidelines, 2025.
SMBC is at present carrying on banking enterprise in India in department mode via its 4 branches situated in New Delhi, Mumbai, Chennai and Bengaluru. The ‘in-principle’ approval has been granted to the financial institution for establishing a WOS via conversion of its current branches in India, RBI stated in an announcement.
The RBI would take into account granting a licence for graduation of banking enterprise in WOS mode below Section 22 (1) of the Banking Regulation Act, 1949 to SMBC on being glad that the financial institution has complied with the requisite situations laid down by RBI as a part of ‘in-principle’ approval.
Notably, a overseas financial institution intending to ascertain a completely owned subsidiary (WOS) in India should acquire prior approval from the regulator or supervisory authority in its house nation. Such approval is a prerequisite for consideration of the appliance by the Reserve Bank of India (RBI).
As per the RBI tips, the applicant financial institution should additionally fulfill the RBI that it’s topic to efficient and enough prudential supervision in its house jurisdiction, in accordance with internationally accepted supervisory requirements. This contains being below consolidated supervision to make sure complete oversight of the financial institution’s international operations.
In assessing functions for the institution of a WOS in India, the RBI will take into consideration a spread of things. These embody the character of financial and political relations between India and the nation of incorporation of the dad or mum financial institution, the extent of reciprocity prolonged by the house nation to Indian banks, and the monetary soundness and possession construction of the dad or mum financial institution.
Consideration may also be given to the worldwide standing and home-country rating of the financial institution by reputed companies, its credit standing by internationally acknowledged ranking companies, its worldwide presence, and the adequacy of its threat administration framework and inner management methods. (ANI)