diff --git a/changelog/0.8.3_2018-02-26/pull-1648 b/changelog/0.8.3_2018-02-26/pull-1648
new file mode 100644
index 000000000..1613612a9
--- /dev/null
+++ b/changelog/0.8.3_2018-02-26/pull-1648
@@ -0,0 +1,6 @@
+Enhancement: Ignore AWS permission denied error when creating a repository.
+
+It's not possible to use s3 backend scoped to a subdirectory(with specific permissions).
+Restic doesn't try to create repository in a subdirectory, when 'bucket exists' of parent directory check fails due to permission issues.
+
+https://github.com/restic/restic/pull/1648
\ No newline at end of file
diff --git a/internal/backend/s3/s3.go b/internal/backend/s3/s3.go
index d8d4dcdad..d36679bf7 100644
--- a/internal/backend/s3/s3.go
+++ b/internal/backend/s3/s3.go
@@ -104,6 +104,12 @@ func Create(cfg Config, rt http.RoundTripper) (restic.Backend, error) {
 		return nil, errors.Wrap(err, "open")
 	}
 	found, err := be.client.BucketExists(cfg.Bucket)
+
+	if err != nil && be.IsAccessDenied(err) {
+		err = nil
+		found = true
+	}
+
 	if err != nil {
 		debug.Log("BucketExists(%v) returned err %v", cfg.Bucket, err)
 		return nil, errors.Wrap(err, "client.BucketExists")
@@ -120,6 +126,17 @@ func Create(cfg Config, rt http.RoundTripper) (restic.Backend, error) {
 	return be, nil
 }
 
+// IsAccessDenied returns true if the error is caused by Access Denied.
+func (be *Backend) IsAccessDenied(err error) bool {
+	debug.Log("IsAccessDenied(%T, %#v)", err, err)
+
+	if e, ok := errors.Cause(err).(minio.ErrorResponse); ok && e.Code == "AccessDenied" {
+		return true
+	}
+
+	return false
+}
+
 // IsNotExist returns true if the error is caused by a not existing file.
 func (be *Backend) IsNotExist(err error) bool {
 	debug.Log("IsNotExist(%T, %#v)", err, err)