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 setting up a Wholly Owned Subsidiary (WOS) in India.

The approval comes under the Reserve Bank of India (Setting Up of Wholly Owned Subsidiaries by Foreign Banks) Guidelines, 2025.

SMBC is currently carrying on banking business in India in branch mode through its four branches located in New Delhi, Mumbai, Chennai and Bengaluru. The 'in-principle' approval has been granted to the bank for setting up a WOS through conversion of its existing branches in India, RBI said in a statement.

The RBI would consider granting a licence for commencement of banking business in WOS mode under Section 22 (1) of the Banking Regulation Act, 1949 to SMBC on being satisfied that the bank has complied with the requisite conditions laid down by RBI as part of 'in-principle' approval.

Notably, a foreign bank intending to establish a wholly owned subsidiary (WOS) in India must obtain prior approval from the regulator or supervisory authority in its home country. Such approval is a prerequisite for consideration of the application by the Reserve Bank of India (RBI).

As per the RBI guidelines, the applicant bank must also satisfy the RBI that it is subject to effective and adequate prudential supervision in its home jurisdiction, in accordance with internationally accepted supervisory standards. This includes being under consolidated supervision to ensure comprehensive oversight of the bank's global operations.

In assessing applications for the establishment of a WOS in India, the RBI will take into account a range of factors. These include the nature of economic and political relations between India and the country of incorporation of the parent bank, the extent of reciprocity extended by the home country to Indian banks, and the financial soundness and ownership structure of the parent bank.

Consideration will also be given to the international standing and home-country ranking of the bank by reputed agencies, its credit rating by internationally recognized rating agencies, its international presence, and the adequacy of its risk management framework and internal control systems. (ANI)