India’s competition regulator has approved Sumitomo Mitsui Banking Corporation’s (SMBC) plan to acquire a 20% stake in Yes Bank for US$1.6 billion.

SMBC, a Japanese bank, agreed in May to purchase the stake from a group of Indian banks, including State Bank of India, Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank.

In August, SMBC also received approval from the Reserve Bank of India to increase its stake in Yes Bank to up to 24.99%.

The RBI said SMBC would not be classified as Yes Bank’s “promoter,” which would have triggered stricter regulatory requirements.

This transaction is the largest cross-border M&A deal in India’s financial sector.