Why Foreign Investors Put ₹1.81 Lakh Cr Into Indian Banks and NBFCs
From Fairfax buying IDBI Bank to Bank of America investing in Jio Credit, 9 large deals have happened in the last 18 months. Here is a simple look at the list and why it makes sense for both sides.
The 9 Large Deals in Banks and NBFCs (2025–2026)
| INDIAN LENDER | TYPE | FOREIGN INVESTOR | STAKE BOUGHT | AMOUNT | DATE |
|---|---|---|---|---|---|
| IDBI Bank | Bank | Fairfax Financial (Canada) | 60.72% | ~₹53,000 Cr | Oct 2026 |
| Shriram Finance | NBFC | MUFG (Japan) | 20.00% | ₹39,618 Cr | Dec 2025 |
| RBL Bank | Bank | Emirates NBD (UAE) | 60.00% | ₹26,853 Cr | Jun 2026 |
| Jio Credit (Jio Financial) | NBFC | Bank of America (US) | Up to 49.90% | ₹18,268 Cr | Aug 2026 |
| Yes Bank | Bank | SMBC (Japan) | 24.22% | ₹16,333 Cr | Sep 2025 |
| Sammaan Capital | NBFC | IHC (UAE) | ~43.50% | ₹8,850 Cr | Oct 2025 |
| IDFC FIRST Bank | Bank | Warburg Pincus & ADIA | ~15.00% | ₹7,500 Cr | Apr 2025 |
| Federal Bank | Bank | Blackstone (US) | 9.99% | ₹6,197 Cr | Oct 2025 |
| Manappuram Finance | NBFC | Bain Capital (US) | 18.00% | ₹4,385 Cr | Mar 2025 |
Why Are Foreign Investors Buying Into Indian Lenders?
Foreign banks like Citi and HSBC tried running their own branches in India for decades and struggled to grow beyond a few big cities. Buying into IDBI or partnering with Jio or Shriram gives a foreign buyer thousands of branches, local staff, and millions of customers from day one.
Japanese banks like MUFG and SMBC sit on huge piles of low-cost deposits in a home market that barely grows. UAE banks like Emirates NBD want to serve the millions of Indians and businesses moving money between the Gulf and India, where loan demand is growing 12–15% a year.
Five years ago, foreign investors stayed away because Indian banks were stuck with old corporate bad loans. Today, those books are clean. IDBI Bank, which had ~30% bad loans in 2019, is now down to 0.15% net bad loans and made ₹9,513 Cr in profit last year.
Why Does It Make Sense for the Indian Side?
When IDBI (2019) and Yes Bank (2020) were failing, LIC and SBI stepped in to save them. LIC put ₹26,367 Cr into IDBI. In this sale, LIC gets ~₹26,440 Cr back in cash for half its stake, and still keeps a 19% stake worth ~₹16,580 Cr. SBI similarly exited Yes Bank to SMBC at a profit.
Unlike banks, NBFCs cannot take public savings deposits; they have to borrow money from the market to lend it out. Having Bank of America (in Jio Credit) or MUFG (in Shriram) put in ₹18,000–40,000 Cr gives them long-term money and helps them borrow at lower interest rates.
India's four biggest private banks (HDFC, ICICI, Axis, and Kotak) attract the lion's share of cheap deposits. Smaller banks like RBL, Yes Bank, IDFC FIRST, and Federal Bank need large, patient backers so they can open more branches and lend more aggressively.
Three Common Questions About These Deals
The RBI does not allow corporate houses (like Tata, Reliance, Birla, or Adani) to own banks. The rule is simple: if a business group owns a bank, it might use public depositors' money to give easy loans to its own companies. Corporate groups can only run NBFCs, which don't take public deposits.
Big Indian banks already have branches in every major neighbourhood. Paying ₹50,000 Cr in cash for a mid-sized bank means paying for duplicate branches and taking on an older cost structure. For a foreign buyer entering India, that same branch network is brand new reach.
No. Even when Fairfax buys 60.72% of IDBI Bank or Emirates NBD buys 60% of RBL Bank, Indian banking law caps any single shareholder's voting rights at 26%. They get 60% of the economic profits, but voting power stays capped and the bank remains under tight RBI rules.