Emirates NBD to acquire majority stake in RBL Bank for ₹26,850 crore

Mumbai: Emirates NBD is set to acquire a majority stake in RBL Bank Limited for $3 billion or ₹26,850 crore, marking the largest ever foreign direct investment and equity fundraise in the Indian banking sector. The news comes barely five months after RBI granted in-principle approval to the Dubai bank to establish a wholly owned subsidiary in India.

It will also mark the largest fundraise via preferential issuance by a listed company, and the first acquisition of majority interest in a “profitable Indian bank” by a foreign bank, the company said in a joint release. It added that the proposed transaction underscores ENBD’s long-term commitment to the Indian market, and long-term confidence in India’s fast-growing financial sector.

“This partnership secures a robust and globally respected anchor shareholder, providing a strong capital base for our future,” RBL Bank managing director and chief executive officer R Subramaniakumar said in the release.

Subject to regulatory and other approvals, Emirates NBD will be designated as the promoter of the domestic bank if and when the transaction is completed. Accordingly, it will also have the right to nominate directors to the board of the bank.

Cap on voting rights

Mint reported on 13 October that Dubai's Emirates NBD Bank PJSC was in talks to buy a controlling stake in Indian private lender RBL Bank Ltd for over $1 billion. However, even if it approves the Emirates-RBL deal, RBI is likely to cap the voting rights of the Dubai entity at 26% due to “regulatory requirements", the report said, quoting two people aware of the matter.

An RBI circular in January 2023 said no bank shareholder can exercise voting rights above 26%. Normally, non-promoters— individuals or non-financial institutions—can buy up to 10% in a bank, while financial institutions can buy up to 15%. However, RBI “may also permit higher shareholding on a case-to-case basis", it said in the circular cited above.

RBI governor Sanjay Malhotra told CNBC TV18 in July that the central bank had not yet received any case where a foreign bank wants to own 26% in Indian banks. “As per the FDI policy, the foreign banks are allowed up to 74%. Foreign banks can certainly have 26% stake in an Indian bank," he told the channel.

There have been very few cases of foreign banks acquiring Indian lenders. Apart from the recent acquisition of 24% stake in Yes Bank by Japan-based Sumitomo Group, RBI had allowed the takeover of struggling Lakshmi Vilas Bank with the local unit of Singapore’s largest lender DBS Bank in November 2020. In 2018, Fairfax India, the local unit of Canada's Fairfax, acquired a 51% stake in CSB Bank Ltd, then called the Catholic Syrian Bank (CSB). Currently, it holds 40% in the bank.

RBI allows foreign banks to operate either as a branch, or a wholly-owned subsidiary of the parent. All except two—DBS Bank India and SBM Bank India—operate as branches. The central bank prefers foreign banks operating subsidiaries rather than branches in India by allowing local units of these banks more operational flexibility than branches.

Deal details

The proposed investment will be made via a preferential issue of up to 60% of the share capital of the bank, including a mandatory open offer for the purchase of up to 26% stake from the public shareholders of RBL Bank, as per Sebi regulations. The bank will issue 95,90,45,636 shares to the UAE-based investor at ₹280, lower than Friday’s closing price of ₹299.70 on the NSE.

After the proposed preferential issue, India branches of Emirates NBD will be merged with those of the domestic lender, as required by RBI.

“The transaction brings together ENBD’s strong capital base and regional franchise with RBL Bank’s established presence and extensive distribution across India,” the release said. The capital infusion will strengthen RBL Bank’s balance sheet, enhance its Tier-1 capital ratio, and provide long-term growth capital, enabling the bank to deepen its deposit franchise and expand its branch network.

“An enhanced presence in India for ENBD, through a well-established business like RBL Bank, would further complement ENBD’s service to customers operating throughout the MENATSA region. We envisage to support Indian businesses, trade, projects, and other opportunities throughout the region leveraging our network,” Shayne Nelson, Group CEO of Emirates NBD was quoted as saying.

RBL Bank chairman Chandan Sinha said that the bank will be able to capitalise on Emirates NBD’s strong credit rating and its established relationships with companies, banks, and financial institutions across India.

Ernst & Young LLP (EY) - Investment Banking, J.P. Morgan and NeoStrat Advisors advised Emirates NBD on the deal. Shardul Amarchand Mangaldas & Co was the legal advisor for ENBD and AZB & Partners for RBL Bank.

M&A impact

In India, Emirates NBD had a loan book of ₹6,568.2 crore as of 31 March 2025, according to its latest available annual report, up from ₹4,641.6 crore in FY24. Parent Emirates NBD’s total assets stood at $296 billion as of 30 June with a loan book of $155 billion. The lender reported profit after tax of $6.2 billion for calendar year 2024.

Late evening on Saturday, RBL Bank, as a part of its Q2 results, reported that its net advances crossed ₹1 lakh crore during the quarter ended 30 September, rising 14% on year and 6% on quarter. Net profit for Q2 FY26 was ₹179 crore, 20% lower on year and 11% lower sequentially–which the bank attributed to a ₹44 crore marked-to-market hit on the value of unlisted equities of the bank.

The capital infusion from Emirates NBD will result in a three-fold jump in the local lender’s net worth from ₹15,356 crore as of September-end to over ₹42,000 crore, as per an investor presentation on the proposed deal. Total capital adequacy was 15.0% as of 30 September 2025, lower than 15.6% a quarter ago. Common equity tier-I capital ratio was 13.5%, also lower than 14.0% in the previous quarter.

Founded as Ratnakar Bank Ltd in 1943 in Maharashtra's Kolhapur, RBL had 1,911 total touchpoints as of the end of September, of which 564 are bank branches and 1,347 are business correspondent branches which in turn include 283 banking outlets.

A September 2025 ratings release by Care Ratings shows that the bank has a portfolio comprising Corporate & Institutional Banking (C&IB), Credit Cards, Commercial Banking (CB), Business Loans and Micro Loans, while also expanding into newer secured products such as housing loans, loans against property (LAP), rural vehicle finance. In Q2 of FY26, RBL Bank recorded a y-o-y growth of 10% in the retail segment and 22% in the wholesale segment.

The transaction will build on RBL Bank’s strong foundation of a diversified retail engine, granular deposits, and prudent risk management; enable accelerated expansion in branches, digital platforms, and customer engagement; and create capacity to invest in brand, technology, and product innovation for sustained profitability and scale. It will also enable an improvement in the bank’s credit rating, lower cost of funds, and help strengthen the balance sheet, the presentation said.

“The partnership brings global expertise, digital innovation, and governance excellence to drive RBL’s next phase of growth.”