RBL expects Emirates NBD fund infusion by June 2026, aims multi-fold growth with new capital

Mumbai: RBL Bank expects to complete its proposed $3 billion (about Rs 26,850 crore) capital infusion from Emirates NBD Bank by June next year, after securing necessary regulatory and government approvals, Managing Director and CEO R Subramaniakumar said on Sunday.

The deal marks the largest-ever foreign direct investment (FDI) in India’s financial services sector.

Following the transaction, RBL Bank will merge with Emirates NBD’s wholly-owned Indian subsidiary to become a “listed foreign bank subsidiary.” Subramaniakumar said the capital will help the bank transition from a mid-sized lender to the league of large private banks over the next three to five years.

Head of strategy Jaideep Iyer said the funds are expected within five to eight months. Post-deal, RBL’s capital adequacy ratio will surge from 15 per cent to 40 per cent. The bank’s shareholders will vote on the stake purchase at an extraordinary general meeting on November 19 in Kolhapur. Regulatory approvals from the RBI, government, and Competition Commission of India are expected to take six months.

As per Sebi norms, the transaction will trigger an open offer for a 26 per cent stake. Emirates NBD will acquire at least 51 per cent through preferential allotment, with the total stake potentially reaching 60 per cent after merging its Indian arm.

The bank said NBD’s holding will comply with the 74 per cent FDI cap and maintain a 25 per cent minimum public float, while voting rights will remain capped at 26 per cent.

Unlike domestic promoters, Emirates NBD will not be required to reduce its controlling stake later, as per rules for foreign bank subsidiaries.

The deal follows other recent high-profile banking investments, including Japan’s SMBC acquiring a 24 per cent stake in Yes Bank. Subramaniakumar said RBL’s partnership with NBD was secured on the bank’s own strengths, adding that multiple suitors had shown interest.

The expanded board will comprise 14 members, half of them independent directors. RBL Bank, with 564 branches, will retain its brand for now, while NBD’s Indian subsidiary currently operates three wholesale-focused branches.

The lender will continue to hold its 5.7 per cent stake in Utkarsh Small Finance Bank and hopes existing shareholders like Mahindra Group remain invested.