New Delhi, Oct. 28 -- Foreign capital is decisively growing in India's private banking space, as evidenced by Japan's SMBC's acquisition of a significant stake in Indian lender Yes Bank, followed by Warburg Pincus picking up nearly 10% in IDFC First Bank.

The trend then extended to RBL Bank, which received funds from Emirates NBD in terms of the acquisition of a majority stake, and most recently to Federal Bank, which saw an infusion from Blackstone. In all, these deals represent over $6 billion of fresh foreign capital flowing into India's private banking sector over the past few months.

The buying by foreign banks is indicative of the sector being at an inflexion point. While part of the foreign interest could be attributed to the Res...