Emirates NBD in India: Bank gets in-principle nod to set up wholly owned subsidiary

The Reserve Bank of India (RBI) has given an in-principle approval to UAE’s Emirates NBD Bank PJSC to set up a wholly owned subsidiary (WOS) in India.

Emirates NBD is currently conducting conducting banking business in India in branch mode through its branches located in Chennai, Gurugram and Mumbai. The in-principle approval has been granted to the bank for setting up a WOS through conversion of its existing branches in India, the RBI said.

“The RBI would consider granting a licence for commencement of banking business in WOS mode under Section 22 (1) of the Banking Regulation Act, 1949 to Emirates NBD Bank PJSC, on being satisfied that the bank has complied with the requisite conditions laid down by RBI as part of ‘in-principle’ approval,” the regulator said.

At present, foreign banks have presence in India only through branches.

According to the RBI, any foreign bank that wishes to set up a WOS in India should have the approval of the home country regulator/supervisor.

“A foreign bank applying for setting up a WOS in India must satisfy RBI that it is subject to adequate prudential supervision as per internationally accepted standards, which includes consolidated supervision in its home country,” the RBI states.

The process of setting up a WOS involves creating separate legal entities, having their own capital base and local board of directors.

It also ensures that there is a clear delineation between the assets and liabilities of the domestic bank and those of its foreign parent, and clearly provides for ring fenced capital and assets within the host country.

It also imparts clarity and certainty with respect to applicability of the laws of country of incorporation on the locally incorporated subsidiary.

A locally incorporated bank has its own board of directors and these directors are required to act in the best interests of the bank, to prevent the bank from carrying on business in a manner likely to create a risk of serious loss to the bank’s creditors/depositors.

Moreover, local incorporation provides effective control to the local regulators.

Emirates NBD’s profit before tax was up 56 percent quarter-to-quarter growth to Dh7.8 billion for the first three months of 2025.

Net profit, too, was up 56 percent q-to-q to Dh6.2 billion. But on a year-to-year basis, Emirates NBD's net profit was down from the Dh6.7 billion for Q1-2024.

The Dubai bank's balance-sheet cleared the Dh1 trillion milestone, in large part helped by the 'impressive' loan and deposit growth.