[MUMBAI] Emirates NBD bank will invest as much as US$3.1 billion in India’s RBL Bank in the biggest foreign investments in the country’s financial sector and underscoring growing overseas interest in the domestic banking space.
The Dubai-based lender will own about 60 per cent of RBL Bank once the deal is completed, according to an exchange filing on Saturday (Oct 18). As part of the agreement, Emirates NBD will receive up to 959 million new shares at 280 rupees (S$4.10) each, a 6.5 per cent discount to Friday’s close.
The investment has also triggered an open offer by Emirates NBD to buy a stake of up to 26 per cent from RBL Bank’s public shareholders at the same price, in line with India’s takeover rules.
The deal is part of a broader trend of rising foreign investment in the nation’s financial services sector. Earlier this month, Abu Dhabi’s largest listed company, International Holding Company, acquired a 43.5 per cent holding in shadow lender Sammaan Capital for almost US$1 billion. Japan’s Sumitomo Mitsui Banking Corporation last month completed its acquisition of a 20 per cent stake in Yes Bank for about US$1.6 billion.
The exuberance for India’s financial sector contrasts with turbulence in global banking. Recent US collapses, including Tricolor Holdings and First Brands Group have stoked fears of hidden credit losses. Against this backdrop, India’s banking sector – with limited exposure to global shocks – continues to benefit from rapid digital adoption, government initiatives, and a large under-banked population.
“Geopolitical risks have accelerated financial and supply chain risks, and foreign investors are looking for alphas in countries that minimise these risks,” said Vivek Ramji Iyer, partner and leader for financial services practices at Grant Thornton Bharat. “India’s domestic focus and low correlation with the global economy make it a lucrative entry point.”
The deal will allow RBL Bank to expand its corporate lending, speed up retail loan growth, and use digital technology to tap into the Middle East, chief executive officer R Subramaniakumar said at a media briefing on Sunday. He added that “India’s growth story has been accepted globally. This is a natural attraction.”
Shares of the RBL have surged almost 90 per cent this year, far outpacing the 13 per cent rise in the broader banking index, bringing its market value to about US$2.1 billion as of Friday. Meanwhile, Emirates NBD, the second-largest bank in the United Arab Emirates, has gained about 25 per cent in 2025 in Dubai trading.
The transaction requires approval from stakeholders including the Reserve Bank of India. Once completed, Emirates NBD will merge its Indian branches with RBL Bank. The lender will maintain a minimum 51 per cent stake at all times and ensure its shareholding does not exceed the 74 per cent overseas investment limit, Subramaniakumar said. BLOOMBERG
