{"id":84835,"date":"2025-11-10T00:00:00","date_gmt":"2025-11-10T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/mena-india\/government-rbi-discuss-new-bank-mergers-to-build-global-scale-lenders\/"},"modified":"2025-11-10T00:00:00","modified_gmt":"2025-11-10T00:00:00","slug":"government-rbi-discuss-new-bank-mergers-to-build-global-scale-lenders","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/mena-india\/2025\/11\/10\/government-rbi-discuss-new-bank-mergers-to-build-global-scale-lenders\/","title":{"rendered":"Government, RBI discuss new bank mergers to build global-scale lenders"},"content":{"rendered":"

The Indian<\/strong> government is in talks with the Reserve Bank of India (RBI) and <\/strong>lenders to encourage the creation of larger, more globally competitive banks<\/strong> through the potential mergers of state-run institutions, Reuters<\/a> reports, citing Finance Minister Nirmala Sitharaman.<\/p>\n

Discussions underway:<\/strong> India \u201cneeds a lot of big, world-class banks,\u201d Sitharaman said, adding that work has already begun with the central bank and lenders. Consolidation of existing public-sector banks could be one approach, though developing the right ecosystem for expansion is equally important, she said.<\/p>\n

Regulatory backdrop: <\/strong>The RBI lifted curbs last month on bank acquisition financing to boost credit flow in the real economy, Reuters<\/a> reports, citing RBI Governor Sanjay Malhotra. The change allows banks to fund takeovers under new guardrails that cap lending at 70% of transaction value and limit debt-to-equity ratios. The move is part of a broader set of measures aimed at strengthening credit growth and ensuring stability across India\u2019s banking system.<\/p>\n

Reform context: <\/strong>The government had earlier merged 27 public-sector banks into 12 in 2020 to strengthen the sector. Building well-capitalised banks aligns with India's goal of becoming a developed economy by 2047 and is essential to meet the country\u2019s growing credit needs, Sitharaman said. The government is also considering raising foreign investment limits in state-owned banks as part of its broader financial-sector reforms.<\/p>\n

BY THE NUMBERS- <\/strong>India had 12 state-owned banks with combined assets of about INR 171 tn (USD 1.95 tn) as of March, accounting for roughly 55% of the country's banking sector. <\/p>\n

\n

THE UAE ANGLE-<\/p>\n

The reform talks come as <\/strong>Adia<\/strong> was reportedly among the buyers of a 3.45% stake in RBL <\/strong>Bank <\/strong>recently sold by conglomerate Mahindra & Mahindra, according to Moneycontrol<\/a>. The Indian conglomerate sold 21.1 mn shares at INR 320.7 each, marking a full exit from its holding in the private-sector Indian lender. The transaction is worth roughly INR 6.8 bn, according to our calculations.<\/p>\n

The sale follows a surge in RBL Bank\u2019s share price <\/strong>after RBL announced that Emirates NBD will launch its open offer for the Mumbai-listed bank\u2019s public shares<\/a> on Friday, 12 December. Emirates NBD\u2019s board approved a plan last month to acquire 51-74% of India\u2019s RBL Bank through a USD 3 bn preferential share issuance<\/a>, marking what would be the largest foreign investment in India\u2019s financial sector. <\/p>\n

Other buyers included global investors<\/strong> Goldman Sachs, Morgan Stanley, Citigroup Global, and Societe Generale, alongside leading Indian institutional investors including SBI Mutual Fund, Kotak Mahindra Mutual Fund, and HDFC Standard Life Ins.<\/p>\n","protected":false},"excerpt":{"rendered":"

The finance minister said talks with RBI and banks are underway to create globally competitive lenders<\/p>\n","protected":false},"author":1,"featured_media":84836,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2495],"tags":[2494,2493,2402],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-84835","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-banking","tag-emirates-nbd","tag-enterpriseam-india","wpautop","entry"],"acf":{"mongo_id":"b80f9090-8337-4751-88f7-429394f52adf","order":"5","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2025\/11\/585.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Government, 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