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The Reserve Bank of India has approved Dubai-based Emirates NBD Bank to acquire up to a 74 per cent stake in RBL Bank, marking a key step towards the lender becoming a foreign-owned entity. The approval, valid for one year, follows the investor's earlier proposal to acquire a majority stake valued at INR 26,853 crore. The deal is subject to multiple regulatory clearances and compliance requirements, including government approval for foreign investment beyond 49 per cent and adherence to banking and securities regulations.
The Reserve Bank of India has granted approval to Emirates NBD Bank to acquire up to a 74 per cent stake in RBL Bank, allowing the lender to transition into a foreign bank operating in India through a subsidiary structure. The approval, received in the past week, will remain valid for a period of one year. Advertisement
This development follows the UAE-based bank's earlier proposal to acquire a 60 per cent stake in RBL Bank for approximately INR 26,853 crore. The central bank has specified that Emirates NBD must maintain a minimum shareholding of 51 per cent in the paid-up capital of the bank, after which RBL Bank will be classified as a foreign bank in subsidiary mode, with Emirates NBD as its parent entity.
As part of the approval conditions, the regulatory framework applicable to wholly owned subsidiaries of foreign banks in India will apply to RBL Bank. However, the requirement mandating that at least half of the directors attending board meetings be independent directors has been relaxed in this case.
The bank has been directed to amend its Articles of Association accordingly and seek further approval from the RBI for these changes. Additionally, the central bank has raised no objection to Emirates NBD being designated as the promoter of RBL Bank, subject to compliance with regulations set by the Securities and Exchange Board of India.
Despite the proposed majority stake, the voting rights of Emirates NBD will be capped at 26 per cent, in line with provisions under the Banking Regulation Act, 1949. The investor has also been granted temporary exemption from the requirement of maintaining a single mode of presence in India until its existing branches are merged with RBL Bank or within one year, whichever is earlier.
The approval remains conditional on several regulatory clearances, including approval from the Government of India for foreign investment beyond 49 per cent under the approval route. The transaction must also comply with provisions under the Banking Regulation Act, FEMA 1999, RBI guidelines, and SEBI regulations.
The deal is further subject to additional approvals and standard pre-conditions outlined in the investment agreement signed between the two entities in October 2025. In the past, the Competition Commission of India had already cleared the proposed acquisition, providing an earlier regulatory nod to the transaction.
This move is seen as part of a broader trend where foreign lenders are exploring opportunities to expand their footprint in India through acquisitions rather than organic growth, especially in the private banking space.
Source PTI
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