Mumbai-based private lender RBL Bank Ltd. has denied reports of Emirates NBD looking to acquire a minority stake. The lender issued this clarification to CNBC-TV18 on Wednesday, July 2.“The media article that you are referring to is incorrect and speculative in nature. We deny the contents of the article,” RBL Bank’s response stated.
Post this response, the stock gave up some of this gains, turned negative, but regained its losses to trade with gains again. The stock is up for the fifth straight day on Wednesday and has gained in seven out of the last eight trading sessions.
Earlier in the day, a report in the Economic Times stated that Dubai-based Emirates NBD is exploring possibilities to acquire a minority stake in the lender, which could mark its foray into the Indian banking sector. Reports had earlier indicated its interest to acquire stake in IDBI Bank as well.According to the report, NBD is keen on tapping into India’s growing financial sector and sees potential in mid-sized private banks. However, foreign ownership in Indian banks is tightly regulated. The Reserve Bank of India (RBI) permits foreign institutions to hold a maximum of 15% in an Indian bank, with exceptions being rare and granted selectively.
For instance, Canada’s Fairfax Financial was permitted a higher stake in CSB Bank, and Singapore’s DBS was allowed to merge with the struggling Lakshmi Vilas Bank.More recently, Japan’s SMBC has sought RBI’s nod to acquire a 20% stake in Yes Bank. NBD may be drawing confidence from this precedent, although Yes Bank was a special case involving State Bank of India’s planned exit from a temporary bailout-led shareholding.
Post this response, the stock gave up some of this gains, turned negative, but regained its losses to trade with gains again. The stock is up for the fifth straight day on Wednesday and has gained in seven out of the last eight trading sessions.
Earlier in the day, a report in the Economic Times stated that Dubai-based Emirates NBD is exploring possibilities to acquire a minority stake in the lender, which could mark its foray into the Indian banking sector. Reports had earlier indicated its interest to acquire stake in IDBI Bank as well.According to the report, NBD is keen on tapping into India’s growing financial sector and sees potential in mid-sized private banks. However, foreign ownership in Indian banks is tightly regulated. The Reserve Bank of India (RBI) permits foreign institutions to hold a maximum of 15% in an Indian bank, with exceptions being rare and granted selectively.
For instance, Canada’s Fairfax Financial was permitted a higher stake in CSB Bank, and Singapore’s DBS was allowed to merge with the struggling Lakshmi Vilas Bank.More recently, Japan’s SMBC has sought RBI’s nod to acquire a 20% stake in Yes Bank. NBD may be drawing confidence from this precedent, although Yes Bank was a special case involving State Bank of India’s planned exit from a temporary bailout-led shareholding.
RBI Governor Sanjay Malhotra had earlier mentioned that they are reviewing the bank ownership norms. CNBC-TV18 has also reached out to the Reserve Bank of India and is awaiting a response.
Earlier this week, RBL Bank had received a 90-day positive catalyst watch from brokerage firm Citi.
The foreign brokerage wrote in its note that it expects RBL Bank’s return on assets (RoA) trajectory to improve by 45-50 basis points driven by much awaited normalisation of credit cost.
Citi raised its price target on RBL Bank to ₹285 from ₹230 earlier.
Shares of RBL Bank are currently witnessing choppy moves, trading little changed at ₹260. The stock has risen 65% so far in 2025.
