Post Emirates investment, RBL aims to join big league

MUMBAI: RBL Bank aims to become one of India's large banks within three to five years, leveraging a strategic tie-up with UAE based Emirates NBD, its managing director and chief executive R Subramaniakumar said.The foreign lender will invest around $3 billion through a preferential-issue to acquire a 60% stake, triggering an open-offer under regulatory guidelines.Subramaniakumar called the partnership a "once-in-a-generation opportunity" to scale RBL's balance-sheet, digital-capabilities, and corporate-reach. "Our aspiration is to move into the league of the large banks. We are currently a mid-size bank, but with the right infusion of capital, technology, and strategic guidance, we aim to expand rapidly and sustainably.

The Emirates NBD partnership gives us the platform to do that," he said.On the timeline, he said: "The first step is shareholder-approval. Then we will get regulatory-approvals. Once the regulatory approval for the $3 billion investment comes, the open-offer will happen. Depending on the response, the preferential-issue will be completed within 15 days of the open-offer closure. Post completion, the India business of Emirates NBD will merge with RBL Bank.

This infusion will take our net-worth to around Rs 42,000 crore and position us among well-capitalized banks.

It enables us to accelerate growth across businesses, invest in technology, brand, and distribution, and create stronger, diversified income-streams."He clarified that while Emirates NBD plans to pick up 60% via preferential-issue, it would trigger an open offer for up to 26%. However the investment would be calibrated to keep total foreign-holding under the statutory 74%.

The investment also factors in 2% through fresh shares issued in lieu of Emirates NBD's India business."Capital is the most important ingredient for any financial institution to grow. A larger, upfront investment will deliver faster results than incremental steps. India is the biggest opportunity for long-term investment," he said.Ensure guardrails for conflict of interest mgt: KotakMeanwhile, Uday Kotak, the founder and non-executive director of Kotak Bank, posted on X: "I welcome opening up of the banking sector to global financial institutions for majority stake. This, along with ensuring guardrails to manage conflict of interest, and providing a level playing field to players,will unleash capacity to serve India's aspirations. Exciting times."