In the past two years, major international financial players—including Blackstone, Emirates NBD, SMBC, Zurich Insurance, and Abu Dhabi’s IHC—have invested billions in Indian banks, insurers, and NBFCs. Blackstone recently acquired a 9.99% stake in Kerala-based Federal Bank. Emirates NBD purchased a 60% stake in RBL Bank for $3 billion, SMBC invested $1.6 billion for 25% in Yes Bank, and Zurich Insurance acquired a 70% majority in Kotak General Insurance for $670 million.
Previously, India’s financial sector was highly regulated, domestic-focused, and fragmented. Today, global capital is flowing in, aided by gradual easing of foreign ownership restrictions by the Reserve Bank of India.
Growth Drivers
- Net income of $46 billion in 2024, 31% YoY growth (McKinsey & Company)
- Low exposure to tariff-affected sectors
- Strong liquidity and capital
- Secured retail lending and large underbanked population (~400 million)
- Digital infrastructure and increasing consumption post-GST
Strategic Opportunities
Foreign investors gain immediate access to licenses, branch networks, and customer bases, which would take decades to build. Mid-sized private banks and NBFCs stabilized after past sector stress (IL&FS, DHFL, Yes Bank) are prime targets.
Risks and Oversight
Majority foreign ownership can influence strategic decisions offshore. Global shocks, rising interest rates, or trade tensions could impact domestic credit flows. RBI and SEBI enforce fit-and-proper checks, capital adequacy, and compliance to safeguard financial stability.
India’s challenge is leveraging foreign capital inflows to strengthen financial independence while fostering sector growth.