RBL Bank, Emirates NBD leaderships chart out post-investment road map

The transaction is to be executed through a primary infusion of roughly $3 billion, or ₹26,850 crore, and the proposed investment is to be made via a preferential issue of up to 60% in RBL Bank

The brass of RBL Bank and Emirates NBD (ENBD) met in Mumbai on Monday to discuss the broad contours of the future business plan for the Indian private lender. The full-day meeting, held at Trident Nariman Point (following a dinner on Sunday), was the first major interaction after the announcement of definitive agreements for ENBD to acquire a controlling stake in RBL Bank.

 

The transaction is to be executed through a primary infusion of roughly $3 billion, or ₹26,850 crore, and the proposed investment is to be made via a preferential issue of up to 60 per cent in RBL Bank. As part of the transaction, ENBD will also make a mandatory open offer to purchase up to 26 per cent from RBL Bank’s shareholders, in line with the Securities and Exchange Board of India’s takeover regulations. 

 

Sources told Business Standard that the meeting “was basically to examine the positioning of the bank and deployment of capital after the entry of ENDB”. RBL Bank is a small and medium-term lender with a retail banking footprint. A top source involved in the ENDB–RBL Bank transaction said, “This meeting was for familiarisation and to understand how they can work together in the long term, especially on the corporate banking side for bigger deals.”

 

The entry of ENBD into RBL Bank marks the third major inflection point in the latter’s journey.

 

Set up in 1943 as Ratnakar Bank in Kolhapur, Maharashtra, its first transformation came in June 2010 when Vishwavir Ahuja — the former country head of Bank of America in India — took charge as managing director (MD) and chief executive officer (CEO) along with a team of high-profile foreign bankers. Besides fresh capital, these bankers enhanced management bandwidth to build systems to improve governance and growth, and to help the bank move up the ladder among its peers.

 

In its second phase, RBL Bank faced rough weather during the pandemic. The Reserve Bank of India’s concerns over bad loans and leadership at the top saw Ahuja exit the bank, with the regulator inducting its nominee, Yogesh Dayal, as a director on the board. The private-sector lender also faced pressure on its liabilities side, which it navigated effectively with support from regulators. R Subramaniakumar joined the bank in mid-2022 as MD and CEO.