New Delhi, May 6 -- Japan's Sumitomo Mitsui Banking Corp. (SMBC) has secured Reserve Bank of India (RBI) go-ahead to acquire 51% in private lender Yes Bank, two people aware of the development said, in a deal that may value the private lender at $1.7 billion.

SMBC will either buy less than 26% in Yes Bank and do a merger through a share swap, or may buy up to 26% and launch an open offer, the people said. Currently, State Bank of India (SBI) and other lenders hold 33% in Yes Bank. SMBC's voting rights in Yes Bank will becappedat26%.

"RBI has given SMBC the go-ahead for acquiring a majority stake and running Yes Bank," one of the two people cited above said on the condition of anonymity. "This happened a few weeks after SBI and other ban...