The Reserve Bank of India has granted in-principle approval to Emirates NBD Bank to establish a wholly owned subsidiary in India by converting its existing branches, the central bank said in a statement on May 19.
The approval was issued under the Scheme for Setting up of Wholly Owned Subsidiaries by Foreign Banks in India. Emirates NBD currently operates three branches in India, located in Mumbai, Chennai and Gurugram.
Converting to a wholly owned subsidiary structure allows foreign banks to operate on a par with domestic lenders. It also subjects them to local regulations, capital requirements, and potential retail deposit market access while ring-fencing the Indian operations from the parent entity’s global balance sheet.
Emirates NBD, the largest bank in Dubai by assets, had previously shown interest in expanding its presence in India. In January 2023, it submitted an expression of interest in the government-led sale of a majority stake in IDBI Bank, according to a Moneycontrol report later corroborated by Reuters.
Under the WOS structure, foreign banks must maintain a minimum capital of 5 billion rupees and comply with priority sector lending targets and other norms applicable to domestic banks.
India’s central bank has been encouraging foreign banks to adopt the WOS model to enhance regulatory oversight and ensure the stability of the financial system. Other lenders, such as DBS Bank and SBM Bank, have previously converted to subsidiaries under this framework.
Emirates NBD’s move comes amid broader efforts by Gulf-based banks to increase exposure to India’s financial services sector, which remains one of the fastest-growing in Asia. The RBI has not specified a timeline for the final approval.
