RBI Approves Emirates NBD's Acquisition of 74% Stake in RBL Bank for $3 Billion

The Reserve Bank of India (RBI) has given its approval to United Arab Emirates (UAE)-based Emirates NBD (ENBD) PJSC to acquire up to a 74 per cent stake in RBL Bank for $3 billion — the largest foreign investment in a domestic bank ever.Under the approval, RBL Bank will be treated as a foreign bank subsidiary with ENBD as its parent.The bank will be governed by provisions applicable to wholly owned subsidiaries of foreign banks, as outlined in the RBI’s Commercial Banks – Governance Directions, 2025.However, the central bank has relaxed a key requirement, stating that the norm mandating at least half of board attendees to be independent directors will not apply in this case.The RBI has advised RBL Bank to amend its Articles of Association to reflect the new structure and seek regulatory approval for the same. The bank said it will initiate necessary steps accordingly.Also ReadFMCG firm Emami to acquire remaining 73.5% stake in Axiom AyurvedapremiumRBI's rupee challenge: Policymakers should not be swayed by absolute levelspremiumTVS Venu group to acquire PGIM'S asset management business in IndiaAllied Blenders & Distillers appoints Amar Sinha as managing directorLarge state run banks see healthy loan grwoth in FY26, beat depositsIn a separate dispensation, the RBI has conveyed no objection to ENBD being classified as the promoter of RBL Bank, subject to compliance with regulations of the Securities and Exchange Board of India (Sebi). Notably, the dilution requirement typically applicable under RBI norms for shareholding in banks has been waived in this instance.However, ENBD’s voting rights in RBL Bank will be capped at 26 per cent, in line with provisions of the Banking Regulation Act, 1949.The RBI has also granted a temporary exemption to ENBD from the “single mode of presence’” requirement, allowing it to operate both through branches and the subsidiary structure until its Indian branches are amalgamated with RBL Bank or within one year, whichever is earlier.The approval remains valid for one year and is contingent upon additional clearances, including approval from the Government of India for investment beyond 49 per cent under the approval route. The transaction will also need to comply with the Foreign Exchange Management Act, 1999, RBI’s shareholding directions, and applicable Sebi regulations.The deal was announced back in October 2025. Last week, the lender announced that Emirates NBD Bank had secured approval from the Central Bank of the United Arab Emirates for its proposed acquisition of a majority stake in the Indian bank.The deal has also received nod from the Competition Commission of India (CCI), and is awaiting Securities and Exchange Board of India’s (Sebi) approval.The transaction will make RBL Bank the largest subsidiary of Emirates NBD outside Dubai.RBL Bank will also undergo a scheme of amalgamation with Emirates NBD’s India branch, paving the way for the consolidation of the latter’s presence in India.As part of the transaction, Emirates NBD Bank will launch an open offer to acquire up to 26 per cent of RBL Bank’s expanded voting share capital at a price of ₹280 per equity share. The mandatory offer, linked to the planned stake acquisition, will cover approximately 415.58 million shares.