Emirates NBD Bank has secured an ‘in-principle’ approval from the Reserve Bank of India (RBI), the Central Bank of the most populous nation in the world, to set up a wholly owned subsidiary (WOS) in the country.
Setting up a wholly owned unit will allow Emirates NBD to be treated on par with local banks.
A statement by the RBI on Monday said: “Emirates NBD Bank is currently carrying on banking business in India in branch mode through its branches located in Chennai, Gurugram and Mumbai. The in-principle approval has been granted to the bank for setting up a WOS through the conversion of its existing branches in India.
“The RBI would consider granting a licence for commencement of banking business in WOS mode under Section 22 (1) of the Banking Regulation Act, 1949 to Emirates NBD Bank PJSC, on being satisfied that the bank has complied with the requisite conditions laid down by the RBI.”
Given the number of Middle East-based, high-net-worth non-resident Indians (NRIs), many of whom are already clients of Emirates NBD, India has always been a huge market for the Dubai bank. Also, India is one of the UAE’s largest trade partners, and both countries aim to increase their bilateral non-oil trade to US$100 billion by 2030.
Setting up a WOS gives Emirates NBD the option to dilute its stake to 74 per cent or less and list on stock exchanges in India.
After a review is made about the extent of penetration of foreign investment in Indian banks and functioning of foreign banks (branch mode and WOSs), the RBI also permits the WOSs to enter into mergers and acquisition transactions with any private sector bank in India subject to the overall foreign investment limit of 74 per cent.
Emirates NBD has been linked as a potential majority stake investor in IDBI Bank, which is owned 45.48 per cent by the Government of India and 49.24 per cent by the Life Insurance Corporation of India. Reuters had reported in August last year that the RBI, following a review of potential buyers, had short-listed Emirates NBD, Fairfax Financial Holdings and Kotak Mahindra Bank as bidders.
In 2024, the UAE’s non-oil trade with India grew by 20.5 per cent to exceed AED240 billion (US$65.35 billion) in 2024, compared to AED199.3 billion in 2023.
India has one of the largest banking systems in the world, comprising 13 public sector banks, 21 private sector banks, 44 foreign banks and 12 small finance banks, as per RBI data.
As of June 2024, the total number of micro-ATMs in India reached 15,17,580. In 2024, the total assets in the public and private banking sectors were approximately US$3,167 billion.
Next steps for Emirates NBD
Now that it has RBI’s in-principle approval, Emirates NBD will have to register the WOS as a company under the Companies Act, 1956. The new banking company (WOS) will then have to approach the Reserve Bank for issuance of a fresh license.
Emirates NBD Bank will then prepare a draft amalgamation scheme for the branches and obtain approval from the bank’s shareholders, including those of the Indian subsidiary. The scheme of amalgamation will then have to be approved by the RBI.
Established in 1963 as National Bank of Dubai (NBD), Emirates NBD’s total assets were approximately AED1 trillion (US$272 billion) as of 31 March 2025. The group now has a presence in 13 countries, serving over 9 million active customers.
