Foreign lenders are rediscovering Indian banking, but now they're buying their way in rather than building from scratch.

Will these deep-pocketed investors shake up the industry? That's our focus this week. Write to me with your views at ira.dugal@thomsonreuters.com.

And, youth protests continue in India's national capital of New Delhi. Scroll down for all the developments and an analysis on what's pushing young people to take to the streets.

This Chinese export boom really has legs – and wings Trump open to idea of joint meeting with Xi, Putin next month Indonesia faces rare MSCI exclusion that could cut it off from global capital Iran ships some LPG, jet fuel despite US blockade, data shows Beijing's population expected to become super-aged by 2035 After years on the fringes of Indian banking, foreign lenders are spending billions to buy the scale they've found difficult to build organically.

Canada’s Fairfax Financial Holdings last week clinched a $5.56 billion deal for a majority stake in IDBI Bank from its two largest shareholders, the Indian government and state-owned insurer Life Insurance Corporation.

Fairfax founder Prem Watsa, on an investor call, called it a “once-in-a-lifetime opportunity” to gain control of a bank in one of the world’s fastest-growing economies. The Canadian investor plans to fold other Indian financial investments into IDBI, creating a business that spans lending, insurance and capital markets. Fairfax is not alone.

Rare for years, deals for control of Indian banks have suddenly picked up as mid-sized lenders look overseas for the deep-pocketed investors needed to fund their next phase of growth. Last year, Japan’s Sumitomo Mitsui Banking Corporation bought a 24% stake in Yes Bank from a group of investors that had rescued the lender in 2020, while Dubai’s Emirates NBD agreed to buy a 60% stake in RBL Bank for $3 billion.

Other recent deals include Bank of America agreeing to buy a 49.9% stake in Mukesh Ambani-backed non-bank lender Jio Financial Services for $1.9 billion, giving it access to a retail and small business banking franchise.

“These deals suggest that investors favoured financial services platforms with scale, regulatory oversight, and substantial capital requirements,” Grant Thornton said in a note.

Mergers and acquisitions in India’s financial sector hit $4.1 billion between January and September, according to Grant Thornton, even before the IDBI transaction was announced. Read here for more on some of the biggest deals. Foreign banks have had a patchy record in India.

American and European lenders expanded aggressively in India in the early 2000s, only to pull back as the global financial crisis, tougher international capital rules and a punishing domestic bad-loan cycle took their toll. This latest wave of investments is different.

The money is coming from a broader set of geographies, notably Japan, the Middle East and North America. And instead of building branch networks and customer bases from scratch, investors are buying into established franchises.

Indian banks' improved operational metrics and reasonable valuations make them an attractive bet, analysts say.

“Bad debts are at multi-decade lows, credit demand remains healthy, and a supportive liquidity backdrop coupled with recent rate hikes will support net interest margins going forward,” said Dan Billis, associate portfolio manager at UK-based investment management firm Alquity.

Valuations remain close to the trough, with the sector trading two standard deviations below its 10-year historical average, Billis said. The regulator has also opened the door wider.

On paper, regulations place a 15% limit on a single foreign financial institution's shareholding in an Indian bank.

But the Reserve Bank of India (RBI) has allowed foreign lenders to take majority or controlling stakes in some Indian banks, granting case-by-case exceptions.

So what happens when billions of dollars of foreign capital meets an already fiercely competitive banking market? One early battleground could be talent.

Indian banking has already seen reshuffling at the top and as new investors overhaul businesses and pursue growth, employee churn could remain elevated, Jefferies said in a note last week.

The bigger question is whether the new owners can succeed where foreign banks have struggled before in India: turning deep pockets into meaningful market The Indian market is considered generally bereft of AI investment opportunities — one reason the benchmark equity indices have underperformed global peers. But a handful of stocks considered proxies have rallied sharply this year. Read this report by my colleague Vivek Kumar M.

Protests against India's top election commission official continue in New Delhi, with a leader of the "cockroach" youth movement arrested and later released.

Protesters want election chief Gyanesh Kumar to resign after a review of the electoral rolls led to millions of voters being removed. Read here to understand more.

There are likely to be more street protests in India this year than at any time in the past decade, the independent conflict monitor Armed Conflict Location & Event Data (ACLED) has said. What's fuelling the discontent? Read this analysis by Reuters' colleagues Tora Agarwala, Saurabh Sharma and Sunil Kataria.