ICRA Limited has maintained RBL Bank 's long-term rating of ICRA AA- on Rating Watch with Positive Implications while enhancing the bank's certificates of deposit programme limit. This rating action follows the ongoing evaluation of Emirates NBD PJSC's (ENBD) proposed ₹26,853 crore investment to acquire a controlling stake in RBL Bank.

Rating Action Summary

ICRA has taken several rating actions on RBL Bank's various instruments:

Transaction Status and Regulatory Progress

The proposed ENBD transaction, announced in October 2025, involves a ₹26,853 crore investment through preferential issue to acquire a 60% controlling stake in RBL Bank. The transaction has received shareholder approval but remains subject to various statutory and regulatory approvals. Additionally, ENBD will make a mandatory open offer for up to 26% stake from public shareholders, and the transaction includes amalgamation of ENBD's Indian branches with RBL Bank.

Current Financial Performance

RBL Bank's financial metrics as of September 30, 2025, reflect a stable position:

Rating Rationale and Key Factors

ICRA's decision to maintain the rating watch reflects several factors. The rating agency acknowledges RBL Bank's comfortable capital position with adequate ratios, though profitability remains constrained by high credit provisions and operating costs. The bank's earnings profile has been impacted by increased slippages in unsecured retail loans, particularly credit cards and microfinance segments, leading to elevated credit costs of 1.30% (annualised) in H1 FY2026.

The substantial equity infusion from the proposed ENBD transaction is expected to support net interest margins and overall profitability. However, ICRA continues to monitor stress in unsecured segments due to worsening credit discipline and overleveraging concerns among borrowers.

Operational Efficiency and Future Outlook

RBL Bank's operational metrics show mixed trends. The bank's cost-to-income ratio remains elevated due to discretionary expenditure for customer franchise expansion and scaling up of in-house credit card collection teams. Operating costs as a percentage of average total assets stood at 4.80% in H1 FY2026.

The bank's deposit base has shown improvement with gradual increase in retail deposits, supporting its liquidity coverage ratio. However, the share of granular deposits (below ₹3 crore) remains relatively low at 51.00% of total deposits as of September 30, 2025.

Resolution Timeline

ICRA will continue monitoring the progress of regulatory approvals and ENBD's strategy for RBL Bank operations. The rating agency will resolve the rating watch upon completion of the transaction, with the substantial capital infusion expected to significantly enhance the bank's financial profile and operational capabilities.

RBL Bank has announced that Emirates NBD Bank (P.J.S.C.) is seeking to acquire a controlling stake in the Indian private sector bank. This development comes as RBL Bank aims to raise its foreign direct investment (FDI) limit to accommodate the proposed investment.

Key Highlights of the Proposed Deal

Open Offer Details

Emirates NBD has launched an open offer to acquire up to 415,586,443 equity shares of RBL Bank, representing 26% of the expanded voting share capital, at ₹280.00 per share. The total consideration for the open offer amounts to ₹116,364.20 crores, assuming full acceptance.

Investment Structure

The proposed investment is structured in two parts:

1. A preferential allotment of 959,045,636 equity shares at ₹280.00 per share, totaling ₹268,532.78 crores.
2. An open offer for an additional 26% stake.

If fully subscribed, this combined transaction would give Emirates NBD control of RBL Bank with a shareholding between 51-74% of the total paid-up share capital.

Offer Price Considerations

The offer price of ₹280.00 represents the highest negotiated price under the investment agreement and is above the 60-day volume weighted average market price of ₹270.97.

Regulatory Approvals

The transaction is subject to various regulatory approvals, including:

• Reserve Bank of India (RBI)
• Competition Commission of India
• Department for Promotion of Industry and Internal Trade (DPIIT)

RBL Bank plans to approach the DPIIT to increase its FDI ceiling from the current 49% to 74%, which is crucial for facilitating Emirates NBD's proposed controlling stake.

Strategic Implications

This significant capital infusion aims to provide RBL Bank with the necessary resources to:

• Expand its corporate lending operations
• Enhance its retail business segments
• Strengthen its digital payments ecosystem
• Broaden its distribution network

Emirates NBD intends to operate in India through RBL Bank as a subsidiary and plans to amalgamate its existing India branch operations with RBL Bank.

Upcoming Shareholder Meeting

RBL Bank has announced an Extraordinary General Meeting to be held on November 12, 2025, at 11:30 am (IST) at Residency Club, Kolhapur. This meeting is crucial for obtaining shareholder approval for the proposed changes in the bank's FDI structure.

Investor Engagement

The bank's management is actively engaging with investors and analysts to discuss its growth strategies. A recent one-on-one meeting with FSSA Investment Managers, held via video conferencing in Mumbai on October 27, 2025, indicates ongoing investor interest in RBL Bank's plans.

This development represents a significant milestone in India's banking sector, potentially setting a precedent for future foreign investments in the country's financial institutions. Stakeholders will be closely watching the regulatory approval process and the subsequent steps in this landmark transaction.