Mumbai: India's non-bank lenders could see heightened foreign interest as global financial capital covets the country's booming retail loan market, industry experts said.
Bank of America Corp. on Wednesday agreed to acquire up to 49.9% of Jio Credit for $1.9 billion, valuing the retail lending unit of Jio Financial Services at $3.8 billion. While only a few global banks operating in India offer retail loans, analysts said such investments are a good way to ride the retail boom without making direct lending commitments.
“There is interest from players in West Asia, South Korea and Japan to invest here. For overseas investors like Bank of America, this is a good entry point into the retail lending space in India through Jio Credit as the NBFC offers a strong platform,” said Pratik Shah, national financial services leader at EY India.
Shah said that this, in turn, gives Jio Credit access to more capital and global expertise. For holding company Jio Financial, part of the Mukesh Ambani-led Reliance group, this means more diversification—it already has asset management, wealth management and securities broking joint ventures with BlackRock and two insurance ventures with Allianz while a third for the life insurance business is in the works.
India’s financial sector has attracted significant global capital in the past couple of years. The most recent of these in the non-bank sector is Japanese lender MUFG's April purchase of a 20% stake in Shriram Finance for ₹39,618 crore. In the banking space, Dubai-based bank Emirates NBD acquired 60% in RBL Bank in June 2026, while Japan's Sumitomo Mitsui Banking Corp. bought 24.22% stake in Yes Bank in September 2025.
“We could see more such discussions and potential investments emerge as global players look to participate in India’s financial services growth story,” said Prakash Agarwal, partner of advisory firm Gefion Capital, and former head of financial institutions at India Ratings. Investing in an established non-banking finance company allows global institutions to join the retail growth story using an existing platform and local market understanding, he said. He said that for global lenders, partnering with or investing in an established Indian NBFC also offers an attractive, relatively efficient entry point into India’s retail lending opportunity.
The latest investments mark a return to what was seen in the mid-2000s, but was cut short in the years that followed. In 2005, Singapore-based DBS Bank bought a 37.5% stake in Cholamandalam Investment and Finance Co. to form a joint venture, before eventually exiting it five years later. In 2008, BNP Paribas Lease Group, the leasing arm of French bank BNP Paribas, invested ₹775 crore for an equipment financing joint venture with Kolkata-based Srei Group.
"It's a trend, and the way NBFCs are growing, it's likely to continue," said Siddharth Goel, director - APAC financial institutions, Fitch Ratings. "Foreign capital is taking a lot of interest, and they are more comfortable with the governance practices of Indian NBFCs after regulations being tightened over the last 4-5 years. Earlier, foreigners were more skeptical on the governance side of the sector," Goel said.
While Indian banks have a collective loan book of ₹219.3 trillion, non-bank lenders have ₹5.9 trillion, according to the latest central bank data. While banks' credit rose 18.6% on year, loans by NBFCs grew 14.4%.
“For a foreigner to come and run the business may be tough and time-consuming. That is an indication they don't want to get involved in small-ticket size transactions directly,” Fitch’s Goel said, adding that the preference is to let local management run the show, given its expertise in tapping India's micro markets.
Large global banks such as JP Morgan, China’s Industrial and Commercial Bank of China (ICBC), and Bank of China, have a presence in India, but do not offer retail loans. Other such banks include China’s Industrial and Commercial Bank of China (ICBC), Bank of China, and the Royal Bank of Canada.
The deal adds to a list of recent marquee transactions in the financial services space and would add to India’s foreign direct investment kitty. RBI data showed that India's net FDI inflows in the June quarter stood at $7.9 billion, against $4.8 billion a year earlier.
To be sure, Bank of America’s indirect entry into retail loans comes even as foreign banks in India have been offloading their retail portfolios to focus on wholesale banking. On 30 June, Deutsche Bank said it will sell its retail banking, affluent private banking and wealth management business in India to Kotak Mahindra Bank for ₹282 crore. In April 2026, Standard Chartered said it will sell its standalone credit card accounts to Federal Bank. Earlier, the UK-based lender had sold its personal loan book worth ₹3,330 crore to Kotak Mahindra Bank in January 2025. In March 2023, Axis Bank had acquired Citibank India's consumer business for ₹11,603 crore.
Jio Credit had extended loans of ₹30,667 crore at the end of the June quarter, a 163% increase from ₹11,665 crore a year earlier, an investor presentation showed. It had debt of ₹28,120 crore, 65% of which was through bank loans. For Jio Credit, the investment is expected to help improve the cost of funds and leverage to fund its fast-growing business. The financing costs for Jio Financial’s lending business increased from ₹133 crore in Q1 FY26 to ₹425 crore in Q1 FY27, the presentation showed.
The proposed deal between Jio Credit and BofA would require approval from the Reserve Bank of India (RBI). Under RBI norms released in November 2025, NBFCs need prior written permission of the regulator for acquisitions of 26% or more, and also when the acquirer gets control, with or without a change in management.