SKS Microfinance not interested in banking foray: Akula

Leading micro-finance firm, SKS Microfinance (SKS), has no plans to foray into banking, a top company official said.

However, the announcement by the Government that new entities would be allowed to set-up banks, is welcome and proactive and will help in promoting financial inclusion, the official said.

"We have no plans to enter into banking. However, we microfinance institutions (MFIs) are happy with the step the Government has taken. It will provide more access to MFIs and also the common man," SKS Microfinance's Founder and Chairman Vikram Akula told PTI here today.

Several MFIs are reported to be interested in entering the banking business along with some corporate houses once the RBI comes out with its guidelines on new banks.

The Reserve Bank had earlier invited suggestions from interested parties and stakeholders on issuing of new banking licences and they have submitted their suggestions to the apex bank, which has floated a discussion paper on the matter.

According to Bangalore-based Sa-Dhan, a body representing MFIs in the country, there are over 262 micro-finance firms with about 26.7-lakh clients, that have a total (on balance-sheet) loan portfolio of Rs 18,344 crore.

Union Finance Minister Pranab Mukherjee had said yesterday that the apex bank is now planning to allow new entities to set up banks and has recently floated a discussion paper.