RBL Bank has submitted applications to regulatory authorities seeking temporary restrictions on foreign shareholding as it progresses with a significant investment proposal from Emirates NBD Bank. The private sector lender announced on December 31 that it had approached both the Reserve Bank of India and the Government of India for approval.

Regulatory Applications for Foreign Shareholding Cap

The bank has requested permission to temporarily cap foreign shareholding at 24% of the total equity instruments on a fully diluted basis. However, this request has not been acceded to under the existing rules and regulations. The application directly relates to the proposed investment by Emirates NBD Bank (P.J.S.C) through a preferential issue of equity shares.

Investment Transaction Progress

Subject to receipt of requisite regulatory approvals and satisfaction of other conditions precedent, both parties will proceed with completion of the proposed transaction as per the investment agreement dated October 18, 2025. RBL Bank emphasized that based on the latest shareholding pattern, Emirates NBD has sufficient foreign shareholding headroom to hold a minimum of 51% stake in the bank.

Both RBL Bank and Emirates NBD are actively engaged in fulfilling the conditions precedent to the proposed transaction. The bank has committed to keeping stock exchanges informed of any material developments regarding this investment.

Executive Leadership Changes

In a separate development, RBL Bank announced that Executive Director Rajeev Ahuja will retire from the bank upon completion of his present term, which ends on February 20, 2026. Accordingly, Ahuja will cease to be the executive director and a key managerial personnel of RBL Bank with effect from February 21, 2026.

The board has accepted Ahuja's request for retirement, which coincides with the end of the term approved earlier by the Reserve Bank of India. The board placed on record its appreciation for Ahuja's contribution to the bank, noting his pivotal role in the institution's transformation from Ratnakar Bank to RBL Bank. He has been associated with the bank since 2010 and has been a core member of the senior management team for over a decade.

Market Performance

Shares of RBL Bank ended at ₹316.15, up by ₹6.45, or 2.08%, on the BSE on December 31. The stock performance reflects investor interest amid these significant corporate developments involving both the Emirates NBD investment proposal and leadership transition.

RBL Bank continues to await crucial regulatory approvals from the Reserve Bank of India and the Government of India for its request to cap foreign shareholding at 24% to facilitate the proposed deal with Emirates NBD. The Dubai-based lender announced a $3 billion deal in October to acquire a 60% stake in RBL Bank through a preferential allotment of equity shares.

Deal Structure and Regulatory Requirements

The acquisition will see Emirates NBD gain control over RBL Bank and be classified as a promoter, while RBL Bank will become a subsidiary of a foreign bank. According to the latest stock exchange filing, Emirates NBD now has sufficient foreign shareholding headroom to hold a minimum 51% stake in RBL Bank.

Regulatory Framework and Approval Process

India permits 74% foreign investment in private banks but restricts individual foreign institution shareholdings to 15% unless specifically approved by regulators. The temporary foreign shareholding cap approval is essential for accommodating the specific investment arrangement between the two banking entities.

Both parties remain actively engaged in fulfilling the conditions precedent to the proposed transaction. "The Bank and the Investor continue to engage with the Government of India and the Reserve Bank of India for the other requisite regulatory approvals," RBL Bank stated in its filing.

Multiple Regulatory Clearances Required

The Emirates NBD-RBL Bank deal requires comprehensive regulatory approval from multiple authorities including the RBI, Securities Exchange Board of India, and the Competition Commission of India. The deal is expected to be closed by April, subject to receiving all necessary regulatory clearances.

Strategic Implications

RBL Bank, originally established in 1943 as The Ratnakar Bank Ltd, transformed from a regional Maharashtra-based bank to a private sector lender in 1970. The bank will continue serving its current client base in retail and micro, small and medium enterprises segments. Emirates NBD is expected to enhance RBL Bank's cross-border financing capabilities and non-resident business development through this strategic acquisition.