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

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

This will also mark the largest fund-raising through preferential issue by a listed company and the first acquisition of a majority stake in a “profitable Indian bank” by a foreign bank, the company said in a joint statement. He added that the proposed transaction underlines ENBD’s long-term commitment to the Indian market and long-term confidence in India’s fast-growing financial sector.

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

Subject to regulatory and other approvals, Emirates NBD will be designated as the promoter of the local bank upon completion of the transaction. Accordingly, the bank will also have the right to appoint managers to the board of directors.

Upper limit of voting rights

Mint reported on October 13 that Dubai’s Emirates NBD Bank PJSC was in talks to acquire a majority stake in Indian private lender RBL Bank Ltd for over $1 billion. But even if it approves the Emirates-RBL deal, the RBI would likely limit the Dubai entity’s voting rights to 26% due to “regulatory requirements”, the report said, citing two people aware of the matter.

An RBI circular in January 2023 said no bank shareholder can exercise more than 26% voting rights. Normally, non-backers (individuals or non-financial institutions) can buy up to 10% of a bank, while financial institutions can buy up to 15%. However, the circular mentioned above stated that the RBI “may also allow higher shareholding as the case may be”.

The central bank is yet to receive any case in which a foreign bank wants to own 26% of Indian banks, RBI governor Sanjay Malhotra told CNBC TV18 in July. He told the channel: “As per the foreign direct investment policy, foreign banks are allowed up to 74% stake. Foreign banks can certainly have 26% stake in an Indian bank.”

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, the RBI had in November 2020 cleared the takeover of the struggling Lakshmi Vilas Bank by the local unit of Singapore’s largest lender DBS Bank. In 2018, Fairfax India, the local unit of Canadian Fairfax, acquired a 51% stake in CSB Bank Ltd, which was then called Catholic Syrian Bank (CSB). Currently 40 percent is in the bank.

The RBI allows foreign banks to operate as a branch or as a wholly owned subsidiary of the parent company. All but two (DBS Bank India and SBM Bank India) operate as branches. The central bank favors foreign banks operating subsidiaries rather than branches in India, giving local units of these banks greater operational flexibility than branches.

Deal details

The proposed investment will be made through preferential issue of up to 60% of the capital of the bank, including mandatory open offer for acquisition of up to 26% shares from public shareholders of RBL Bank as per Sebi regulations. The bank will issue 95,90,45,636 shares to UAE-based investors ₹280, below Friday’s closing price ₹299.70 on NSE.

After the proposed concessional issue, Emirates NBD’s Indian branches will be merged with the domestic lender’s branches as required by the RBI.

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

“ENBD’s stronger presence in India through an established business like RBL Bank will further complement ENBD’s service to customers operating in the MENATSA region. We plan to support Indian businesses, trade, projects and other opportunities in the region by leveraging our network,” said Shayne Nelson, Emirates NBD Group CEO.

Chandan Sinha, chairman of RBL Bank, said the bank can benefit from Emirates NBD’s strong credit rating and established relationships with corporates, banks and financial institutions across India.

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

Merger and acquisition impact

Emirates NBD had a loan book in India. ₹6,568.2 crore as of March 31, 2025, as per its latest available annual report ₹4,641.6 crore in FY24. Total assets of parent company Emirates NBD stood at $296 billion as of June 30, with a loan book of $155 billion. The lender reported after-tax profits of $6.2 billion for the 2024 calendar year.

Late on Saturday evening, RBL Bank reported exceeding its net advances as part of its second quarter results. ₹1 lakh crore in the quarter ended September 30, up 14% year-on-year and 6% quarter-on-quarter. Net profit for the 2nd Quarter of the Year 26 was as follows: ₹179 crore, down 20% year-on-year and 11% sequentially; bank this ₹44 crore market capitalization hit on the value of the bank’s unlisted shares.

Capital infusion from Emirates NBD will result in three-fold increase in local lender’s net worth ₹15,356 crore as of end-September ₹42,000 crore, according to the investor presentation on the proposed deal. Total capital adequacy stood at 15.0% as of September 30, 2025, below 15.6% in the previous quarter. The common equity capital ratio was 13.5%, below the 14.0% in the previous quarter.

Founded in 1943 as Ratnakar Bank Ltd in Kolhapur in Maharashtra, RBL had a total of 1,911 touch points, including 564 bank branches and 1,347 business correspondent branches, as of September end, including 283 banking outlets.

Care Ratings’ rating statement dated September 2025 shows that the bank has a portfolio of Corporate and Institutional Banking (C&IB), Credit Cards, Commercial Banking (CB), Commercial Loans and Micro Loans, while also expanding into newer secured products such as home loans, loans against property (LAP), rural vehicle finance. In the 2nd quarter of FY26, RBL Bank recorded 10% growth in the retail segment and 22% growth in the wholesale segment compared to the same period in the previous year.

The transaction will build on RBL Bank’s strong foundation of diversified retail engine, granular deposits and prudent risk management; enabling accelerated expansion in branches, digital platforms and customer engagement; Create the capacity to invest in brand, technology and product innovation for sustainable profitability and scale. The presentation stated that this would also help improve the bank’s credit rating, reduce the cost of funds and strengthen the balance sheet.

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