The Reserve Bank of India (RBI) has granted in-principle approval to Emirates NBD Bank PJSC, one of the largest banks in the UAE, to establish a wholly owned subsidiary (WOS) in India. This regulatory nod marks a significant milestone for Emirates NBD’s India expansion strategy and aligns with the RBI’s policy to encourage foreign banks to operate through the subsidiary route for enhanced regulatory oversight and operational flexibility. Emirates NBD currently operates in India through branches located in Chennai, Gurugram, and Mumbai, and these will now be consolidated under the new subsidiary structure, subject to the fulfillment of all regulatory conditions set by the RBI.
The wholly owned subsidiary model offers foreign banks several advantages, including the ability to expand their branch network more freely across India and operate on a level playing field with domestic banks. This move will allow Emirates NBD to deepen its presence in the Indian banking sector, providing a broader range of financial products and services to both retail and corporate customers. The RBI’s approval comes under the “Scheme for Setting up of Wholly Owned Subsidiaries by Foreign Banks in India,” which was designed to ensure that foreign banks maintain a strong local capital base and are subject to Indian regulatory norms, thereby protecting the interests of Indian depositors and the financial system.
Also Read: Moneyboxx Finance expands Leadership team, Sandipan Thakur appointed as Head – Collections
To qualify for the WOS status, Emirates NBD had to meet stringent criteria, including obtaining approval from its home country regulator, demonstrating robust financial strength, and being subject to prudential supervision in its home jurisdiction. The RBI also evaluated the bank’s global rankings, risk management capabilities, and the broader economic and political relationship between India and the UAE. The minimum start-up capital requirement for a wholly owned subsidiary is ₹300 crore, and the subsidiary must maintain a capital adequacy ratio of at least 10 percent. The parent bank is permitted to hold 100 percent equity in the Indian subsidiary for a prescribed minimum period, ensuring long-term commitment to the Indian market.
Elets The Banking and Finance Post Magazine has carved out a niche for itself in the crowded market with exclusive & unique content. Get in-depth insights on trend-setting innovations & transformation in the BFSI sector. Best offers for Print + Digital issues! Subscribe here➔ www.eletsonline.com/subscription/
