After the big foreign bet on Indian lenders this year, older private banks get on to the 2026 radar

Subscribe to enjoy similar stories. As a hectic year of deal-making in banking and financial services rolls to a close, experts are predicting that the mergers and acquisitions in 2026 will see mid-sized lenders and foreign capital taking centre-stage. Friday saw the biggest deal of the year – Mitsubishi UFJ Financial Group pouring nearly ₹40,000 crore into Shriram Finance, India's second largest non-banking finance company, for a 20% stake – in the sector highlighting how India has emerged as a magnet for global capital chasing lenders.

Strong balance sheets, regulatory support, and sustained growth prospects have made Indian banks, NBFCs, and investments banks top destination for overseas money. But as capital flows toward scale, a key question is taking shape: will older, mid-tier private banks finally attract meaningful foreign investment in 2026? The past year offers clues. In banks, Dubai-based Emirates NBD acquired a 60% stake in RBL Bank for ₹26,853 crore.

Other marquee deals included Blackstone’s ₹6,196-crore stake in Federal Bank, SMBC’s 24.22% acquisition in Yes Bank, and Abu Dhabi investors picking up significant stakes in Sammaan Capital and IDFC First Bank. These deals signal that capital is flowing, but only into banks and other lenders ready for growth, scale, and change. Bankers and experts say the focus is shifting away from recapitalizing weak balance sheets to upgrading the banking system itself.

“Capital will flow into better platforms rather than into banks [that] merely need funds. Old private sector banks are actually up for a big transition. That may happen through infusions and partnerships," said Abizer Diwanji, founder at NeoStrat Advisors.