Anshu Jain's NBFC may apply for bank licence

Jain's role in the new company will be as an investor and a mentor, while the entire operation will be headed by his ex-colleague Bhupinder Singh

Respected Indians in the global financial world continue to come back to their home turf, lured by the growth rate of the country and the opportunity to tap a market that is familiar and capable of accommodating more.

After Citibank’s Vikram Pandit and Standard Chartered’s Jaspal Bindra, the latest names entering the Indian market are Anshu Jain, former co-head of Deutsche Bank AG, and Bhupinder Singh, the bank’s former co-head of corporate banking business in Asia-Pacific.

Jain and Singh are floating a non-bank financial company (NBFC) that will leverage technology to tap business opportunity in education, housing, and small & medium enterprise segments — all three under-served in India. The NBFC, in which one or two more Indian prominent business houses could invest, would be “reasonably large”, said sources in the know.

The investor base could remain closed to four or five investors, including Jain and Singh.

Jain left Deutsche Bank in June 2015, while Singh left the bank less than a year ago.

Jain’s role in the new company will be as an investor and a mentor, while the entire operation will be headed by Singh, sources said, adding if the new structure fits the bill, the NBFC could also apply for a banking licence once on-tap becomes the norm later this year.

“The draft guidelines are just fresh off the press; there will be live discussions around it and the final guidelines will come. If the NBFC is found to be a right structure, eventually, it would want to become a bank,” said a source. The central bank came with the draft guidelines on on-tap banking licence last week. Jain and Singh, who easily qualify to become bank promoters, given their net worth and long association with banking, easily fit the bill for being the promoter of a full bank.

The yet-to-be named NBFC is expected to start operations in about six weeks and will have its head office in Bandra-Kurla Complex in Mumbai.

The NBFC is busy hiring top talents from foreign and Indian firms and is expected to use technology to originate loans. The credit model will be evolved around smartphones and Aadhaar numbers.

Last month, Jaspal Bindra, former Asia-Pacific chief executive at Standard Chartered Bank, joined the board of Centrum Group as executive chairman. Bindra, who left Standard Chartered in February 2015, is expected to have picked up about 20 per cent stake in Centrum for an undisclosed amount.

Similarly, a fund managed by former Citibank chief Vikram Pandit in November 2014 picked up about 50 per cent stake in JM Financial’s realty lending arm FICS.