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| Over a dozen firms vying for banking licences |
| Press Trust of India / New Delhi Feb 28, 2010, 15:35 IST |
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Over a dozen non-banking finance companies, including those from industrial houses like Tatas, Birlas, Anil Ambani-led Reliance group and Bajaj Group, are lining up plans to seek banking licences once the Reserve Bank of India (RBI) comes up with relevant guidelines.
The host of private sector entities which have been eyeing a banking licence include Aditya Birla Group, Tata Capital, Anil Ambani-led Reliance Capital, Malvinder Singh-led Religare group, Muthoot Group, Bajaj Group and Shriram Finance.
The buzz among the industrial houses and NBFCs for seeking banking licences has been growing ever since Finance Minister Pranab Mukherjee announced last week in his Budget speech that RBI was considering grant of additional bank licences for growth of banking sector.
While officials at companies like Tata Capital, Bajaj group and Shriram Finance were tight-lipped on the issue saying they would be able to comment only after the RBI guidelines were in place, industry sources said that these entities have been vying for a banking licenses for quite some time.
Entities like Aditya Birla Group, Reliance Cap, Muthoot and Religare welcomed the announcement and said that their further line of action would be decided at the right time.
At the same time, the country's top private sector lender ICICI Bank's Chief Executive Officer and Managing Director Chanda Kochhar said that banking was "a very complex business" and it needed to be seen how the RBI formulates the procedure for giving additional licences.
On the other hand, Aditya Birla Group Chairman Kumar Mangalam Birla said: "This has come as a pleasant surprise... We would very much want to become a bank."
"This is a very positive step that will accelerate the mobilisation of resources for transformational growth in infrastructure and other productive sectors of the Indian economy," Reliance Capital Chief Executive Officer Sam Ghosh said.
"This move will potentially open exciting new avenues of growth for Reliance Capital in the future. We await further details and guidelines," he added.
Muthoot Capital also welcomed the announcement and said it would decide on its action plans after the RBI guidelines.
Religare Enterprises Chief Economist Jay Shankar said: "It has been a long time since the NBFCs have been demanding banking licence. This is a positive move and it will augur positively for the banking sector as well."
Delivering his Budget speech, Mukherjee announced that the RBI was considering to give banking licences to some private sector players and NBFCs.
"...There is a need to extend the geographic coverage of banks and improve access to banking services. In this context, I am happy to inform the Honourable Members that the RBI is considering giving some additional banking licences to private sector players," Mukherjee had said.
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