Foreign interest

Growth prospects are attracting investment in the financial sector

- 

The financial sector in India is witnessing a significant interest from foreign entities.

Last week, for instance, United Arab Emirates-based Emirates NBD PJSC entered into an agreement with RBL Bank, a mid-sized private bank, to invest %26,850 crore, or about $3 billion, to acquire a controlling stake of up to 60 percent. Subject to regulatory approval, this will be the biggest foreign investment in an Indian private bank. The investment, according to the management, will help RBL Bank move into the league of large Indian banks. It will help the bank strengthen its presence in corporate banking — Emirates NBD already has a significant presence in Indian wholesale banking. Once the transaction is completed as planned, RBL Bank will become a listed subsidiary of a foreign bank. Although the issues related to the mandatory open offer and public float will be worth watching, the investment agreement marks a significant milestone in Indian banking history.