The Indian regulatory authorities have reportedly rejected Mumbai-based lender RBL Bank’s request to temporarily cap foreign shareholding at 24%, a clearance the bank had sought as part of Dubai-based Emirates NBD’s acquisition of a 60% stake in the bank, Economic Times reports. This was a precautionary measure to avoid violating foreign shareholding limits, ScanX reports.

What happened: RBL Bank said its application to cap foreign ownership at 24% during the approval process was denied. Under India’s banking rules, aggregate foreign investment in a private-sector bank is permitted up to 74%, subject to regulatory approvals and fit-and-proper norms. The reports did not specify which authority took the decision.

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Why it matters: ENBD announced in October that it planned to acquire a 60% stake in RBL Bank for about USD 3 bn in what would be one of the largest foreign takeovers in India’s banking sector.

Next steps: Discussions with regulators are ongoing, and the proposed transaction remains subject to approvals from India’s banking and financial authorities.

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