Emirates NBD takes control of RBL Bank after securing 60% stake

Emirates NBD is now the majority owner of India’s RBL, after getting a historic transaction over the line. The Dubai lender acquired a 60% stake in the Indian private-sector bank for USD 2.8 bn, closing the largest foreign direct investment ever made in India’s banking sector, it confirmed in a press release (pdf).

The acquisition marks the first time a foreign bank has acquired a majority stake in a profitable Indian lender — a barrier that held for decades, and that the Reserve Bank of India and India's capital markets regulator SEBI both had to sign off on. Emirates NBD acquired its stake through a preferential share issue. Public shareholders, offered the chance to exit under India's mandatory open offer rules, didn’t tender their shares (pdf), leaving Emirates NBD with just 60%, rather than the 74% it could’ve potentially bought.

Why it matters: The lender said the partnership will strengthen cross-border trade, investment and financial flows between India, the UAE and other regional markets. It institutionalizes the UAE-India capital corridor at the banking level — giving Dubai’s largest lender by assets a direct presence through more than 600 branches in a market of more than 1.4 bn people.

What’s next: Emirates NBD is consolidating its existing Indian branches into RBL Bank, and positioning itself on the board of RBL Bank, with a reshuffling that saw two resignations of existing board members at the Indian bank, and five new members from Emirates NBD: Group CEO Shayne Nelson, Group CFO Patrick Sullivan, Group Head of Strategy, Analytics, and Venture Capital Neeraj Makin, Group Chief Risk Officer Manoj Chawla, and Group Head of Retail Banking & Wealth Management Marwan Hadi.