India’s banking sector could be heading for another major cross-border acquisition, with First Abu Dhabi Bank (FAB), the UAE’s largest bank, exploring opportunities to acquire a controlling stake in a mid-sized Indian private bank.
The Abu Dhabi-based lender is reportedly interested in acquiring a 51 percent stake in an Indian bank, potentially giving it management control and a significantly larger presence in one of the world’s fastest-growing major economies.
Senior FAB executives have reportedly held discussions with Bandhan Bank and a Kerala-based private bank as part of their preliminary evaluation of potential acquisition targets.
However, no agreement has been reached, and there is no indication that a transaction is imminent.
The identity of the Kerala-based lender reportedly approached by FAB has not been disclosed. Kerala-headquartered CSB Bank and South Indian Bank are among mid-sized private lenders trading around or below their book value. However, it does not establish that FAB has entered into acquisition negotiations with either bank.
For Kerala’s banking industry, the possibility of a major foreign lender acquiring a controlling stake in a regional bank is significant. Such a transaction could reshape ownership structures and potentially accelerate the expansion of the acquired bank.
FAB is understood to be evaluating banks that offer an established geographical presence, reasonable valuations and a relatively straightforward ownership structure.
Bandhan Bank, another lender mentioned in media report, has denied being involved in acquisition discussions with FAB.
The bank clarified on October 27 that reports suggesting its participation in such talks were factually incorrect and that it was not considering any acquisition proposal involving the UAE lender.
The clarification adds uncertainty to speculation surrounding FAB’s potential targets.
Separately, earlier reports had linked Abu Dhabi-based investors, including FAB, to a possible investment in Bandhan Bank’s promoter entity, Bandhan Financial Services. However, acquiring a stake in the promoter company is different from directly acquiring a controlling interest in the bank.
FAB already operates in India through branches in Mumbai and GIFT City, Gujarat. However, acquiring an established domestic bank would allow the lender to expand its footprint much faster than relying solely on organic growth.
The proposed expansion also reflects FAB’s broader strategy of diversifying its operations beyond the Middle East and strengthening its presence in high-growth international markets.
A controlling investment in an Indian private lender could offer FAB an established customer base, branch network and access to domestic banking opportunities.
FAB’s reported interest comes against the backdrop of growing investment by UAE financial institutions in India's banking sector. Its domestic rival, Emirates NBD, completed a major investment in RBL Bank in 2026, acquiring a controlling stake in the Indian lender.
The transaction demonstrated how Gulf-based banks could expand their Indian operations through acquisitions rather than building a nationwide presence from scratch.
Competition between Emirates NBD and FAB in their home market could also influence their international expansion strategies.
For FAB, acquiring an Indian bank could provide opportunities to deepen financial relationships involving trade, remittances, corporate banking and cross-border investment.
Despite reports of preliminary discussions, any potential acquisition remains uncertain.
The transaction would depend on several factors, including the valuation of the target bank, its asset quality, ownership structure and regulatory approvals.
For now, the identity of the Kerala-based bank remains unconfirmed, and there is no publicly established acquisition agreement.