RBI Grants In-Principle Approval to Emirates NBD for India Subsidiary

Current Context: On May 19, 2025, the Reserve Bank of India (RBI) granted in-principle approval to Emirates NBD Bank PJSC, a leading UAE-based banking group, to establish a Wholly Owned Subsidiary (WOS) in India.

Key Highlights:

• Expansion Strategy: Emirates NBD currently operates in Mumbai, Chennai, and Gurugram and will convert these branches into a single subsidiary structure.
• Regulatory Compliance: The RBI will issue a final banking license under Section 22 (1) of the Banking Regulation Act, 1949, once all conditions are met.
• Foreign Bank Presence: Emirates NBD will become the third foreign bank to operate in India via the WOS route, following DBS Bank India Ltd. (2018) and SBM Bank India Ltd. (2017).
• Strategic Benefits: The WOS model allows greater operational flexibility, enabling branch expansion, local lending, and enhanced financial services.

Question:

Q.1 Which Indian law governs the final issuance of a banking license to foreign banks establishing subsidiaries in India?
a) Companies Act, 2013
b) Banking Regulation Act, 1949
c) Foreign Exchange Management Act, 1999
d) Reserve Bank of India Act, 1934

Answer: b) The final banking license will be issued by the RBI under Section 22 (1) of the Banking Regulation Act, 1949.