IDFC, India Post among firms favoured for bank permits

L&T Finance Holdings, Bajaj Finserv and Aditya Birla Nuvo are among the permit applicants

IDFC Ltd and the Department of Posts are among companies favoured for new bank permits that the Reserve Bank of India (RBI) is poised to issue in the coming weeks, a person with direct knowledge of the matter said.

The two companies' strength was in their existing branch networks, the person said, requesting not to be named as the information is not public. The panel, headed by former RBI governor Bimal Jalan, submitted a report on the 25 applicants to the central bank on February 25.

The first permits to be issued in more than a decade would allow new banks to tap rural savings and bolster lending in an economy recovering from the slowest pace of growth in a decade. Just 35 per cent of India's adult population have accounts with financial institutions, compared with the global average of 50 per cent, according to the World Bank.

L&T Finance Holdings Ltd, Bajaj Finserv Ltd and Aditya Birla Nuvo Ltd are among the permit applicants. It's up to RBI to make a final decision on the approvals, the person said, without giving a time frame.

The companies that get a licence will be required to start their banks within 18 months and one out of four branches must be located in towns with fewer than 10,000 people, RBI said in February 2013 when calling for applications.

Alpana Killawala, RBI spokeswoman, couldn't immediately be reached for comment.

India's economy is forecast to grow 4.9 per cent in the 12 months through March 31, compared with the decade-low 4.5 per cent in the previous financial year, the statistics ministry said February 7.