RBL Bank on Wednesday denied media reports stating that Dubai government-owned Emirates NBD Bank is in talks to acquire up to a 20 per cent stake in the private sector lender. The Bank issued a clarification to CNBC TV18 saying that the said reports are incorrect and speculative in nature.
In a statement issued to the publication, RBL Bank’s spokesperson said, “The media article that you are referring to is incorrect and speculative in nature. We deny the contents of the article.”
Earlier, a report by the Economic Times, citing people aware of the matter, had stated that Emirates NBD is exploring possibilities to acquire a minority stake in RBL Bank to mark its foray into the Indian banking sector and is seeing potential in mid-sized private banks.
The investment was said to be in the form of a preferential allotment and is expected to be a primary infusion of capital into the Indian private sector lender bank, the report had added.
Reports had earlier also indicated Emirates NBD’s interest in acquiring a stake in IDBI Bank.
However, foreign ownership in Indian banks is tightly regulated. According to the Reserve Bank of India’s (RBI) rules, foreign institutions are permitted to hold a maximum of 15 per cent in an Indian bank, with exceptions being rare and granted selectively.
More recently though, Japan’s SMBC has sought RBI’s approval to acquire a 20 per cent stake in Yes Bank. The proposed acquisition comes on the heels of an agreement between SMBC and a consortium of eight banks—led by State Bank of India (SBI)—to offload a portion of their holdings in Yes Bank. SBI alone will dilute 13.19 per cent of its stake for Rs 8,889 crore, while the remaining 6.81 per cent will be sold by seven other lenders, including ICICI Bank, HDFC Bank, Kotak Mahindra Bank, and Axis Bank, for a consideration of Rs 4,594 crore.
Shares of RBL Bank were down 2.25 per cent at 12:50 pm today at a trading price of Rs 254.10.