Speaking to ET Now, Gandhi said the recent spurt in deal activity involving foreign institutions should not be interpreted as a change in regulatory approach. “The policy has always permitted large stakes in Indian banks or financial institutions, provided the investor meets the fit-and-proper criteria. What we are seeing now is greater seriousness from foreign institutions in actually applying for approvals,” he said.
No fast-tracking foreign NBFC deals
According to Gandhi, the RBI’s due-diligence framework for evaluating investors remains unchanged and thorough. “There is no shortcut in the process. The Reserve Bank will not reduce its standards or compromise on checks while examining ownership proposals,” he said, adding that timelines for approvals are likely to remain “normal” and in line with past practice.
He noted that earlier interest from overseas investors was largely speculative, with few formal applications reaching the regulator. “Now, foreign institutions are making concrete applications, and once the RBI is satisfied about their credentials, approvals are being granted,” Gandhi said.
The former deputy governor said the renewed interest from global investors reflects India’s growing attractiveness as a financial market, but stressed that regulatory safeguards would remain paramount. “It is a welcome development that foreign institutions are keen to invest in India, but the RBI’s fit-and-proper assessment will continue to be the cornerstone of approvals for stake acquisitions in banks and NBFCs,” he said.
The comments come amid increasing foreign interest in India’s financial sector, particularly in NBFCs and private lenders, as global investors look to tap long-term growth opportunities in the country while navigating a tightly regulated ownership framework.