UAE and Japanese financial institutions buy big stakes in Indian banks

Global financial institutions, particularly from the United Arab Emirates (UAE) and Japan, are buying big stakes in Indian banks as the government relaxes restrictions on foreign entities acquiring large shares. 

Dubai’s largest lender, Emirates NBD, is set to acquire a 60 percent stake in private Indian bank RBL for $3bn, in the largest cross-border acquisition in India’s financial sector.

In October, Japan’s Sumitomo Mitsui Financial Group (SMFG) bought a 24.2 percent stake in Yes Bank for about $1.7bn, becoming its biggest shareholder.

Meanwhile, Japan’s largest lender by assets, Mitsubishi UFJ Financial Group (MUFG), is in the final stages of talks with multiple non-banking financial groups in India to purchase shares worth $4bn in Indian financial institutions.

MUFG will also buy a 20 percent stake in Shriram Finance, one of India's biggest financial companies offering credit solutions for commercial vehicles. 

Existing Indian laws limit shareholdings of any single foreign institution to 15 percent, unless the Reserve Bank of India grants an exemption. 

Indian Finance Minister Nirmala Sitharaman said this month that the government wants to create more "big banks".

In 2025, India’s financial sector had $8bn worth of investment from foreign companies, up from $2.3bn last year and $1.4bn in 2023, according to Dealogic.

India-Israel strategic partnership

The development comes as India and Israel are looking to implement a Free Trade Agreement, in addition to military cooperation and technology transfer in strategic domains. 

On Sunday, Israeli Prime Minister Benjamin Netanyahu said: "Israel and India are strengthening our strategic partnership, more investments, more innovation, and a strong economic corridor from India through Israel to Europe."

Netanyahu made the comments as India's Union Commerce and Industry Minister Piyush Goyal concluded his three-day visit to Israel, and signed the Terms of Reference to launch the Free Trade Agreement (FTA) negotiations, "expected to boost trade, investment, and technology" cooperation.

In Kashmir, a desperate father set himself on fire. India looked away

Read More »

During a trip to New Delhi in early November, Israeli Foreign Minister Gideon Saar praised India as a "global superpower" and thanked Prime Minister Narendra Modi for supporting Israel after the Hamas attacks in October 2023.

Saar met India's Foreign Minister Subrahmanyam Jaishankar and National Security Advisor Ajit Doval to discuss "defence and counterterrorism cooperation".

In September, Sitharaman and her Israeli counterpart Bezalel Smotrich signed a Bilateral Trade Agreement to increase investments between the two countries, which currently stand at $800m.

UAE investments

The same month, after a series of meetings with top officials in the UAE, Goyal said the Emirates was investing heavily in high-tech industries, and India could be looking at collaboration in the sector.

The UAE's investment in India is likely to reach $100bn across sectors, Goyal said at the 12th meeting of the India-UAE high-level task force on investments.

In 2023, the UAE’s Emaar group became the first overseas company to start a mega-mall project in Indian-controlled Kashmir, where it is set to build a massive shopping complex and IT towers.

The move was branded as a "complete betrayal" by activists and Kashmiris in the region and abroad.

The Indian government stands accused of thousands of gross human rights violations and extrajudicial killings in the Kashmir region, with allegations of brutally suppressing a decades-long freedom struggle by Kashmiris.

Kashmiri activists and scholars have cautioned that India seeks to replicate the Palestinian model in Kashmir, where, in 2022, it invited Israeli diplomats to explore joint agriculture collaborations. 

The Israeli government announced that it would be building two "Centres of Excellence" to facilitate the transfer of Israeli technology. 

In January 2022, during an investor meet in Dubai, the Jammu and Kashmir government also entered into a bilateral agreement with the UAE to deliver over $1bn worth of projects in the valley. 

How UAE bases arming Sudan's RSF support US 'grey ops' in Somalia

Read More »

The UAE, which has been accused of direct complicity in the genocide in Sudan at the International Court of Justice, has allowed financial networks in Dubai with expansive business dealings with the Rapid Support Forces (RSF) militias to operate freely. 

The UAE also directly provided financial backing to the RSF in the earlier phases of the conflict, according to The Guardian. 

A recent investigative report by The Sentry, published in October, revealed how enablers in Dubai set up business networks linked to RSF leader Mohamed Hamdan Dagalo. The companies include jewellery trading firms, an interior design business and a management consultancy.

The report identified individuals behind the corporate structures, and said they bought hundreds of Japanese-made Toyota cars for the RSF to convert and mount with machine guns. 

Both SMFG and MUFG have been significant shareholders in Japanese automotive giant Toyota Motor Corporation. 

In June 2024, MUFG and SMFG announced plans to gradually sell their combined $8.5bn cross-shareholdings in Toyota, as two of Japan’s largest banks begin exploring investment opportunities in Indian banks.

The Financial Times reported that one of the biggest deals this year involved the Indian shadow bank Sammaan Capital. The UAE's International Holding Company, the second largest company in the Middle East by market capitalisation after Saudi Aramco, bought a 43.5 percent controlling stake in the bank for $1bn.

The report said the Reserve Bank of India has eased restrictions, telling shadow banks, “you can go ahead and expand your books" as foreign investors are targeting medium-sized banks "that are easier to acquire".