Murugappa Group to examine RBI's guidelines

Chennai-based Murugappa Group said it was interested in applying for a banking licence. But, it will examine the guidelines of the Reserve Bank of India, weigh the pros and cons, and then take a decision whether to apply for a banking licence. "The guidelines have come. Obviously, no individual can take a decision; it has to go to the board. We have to evaluate whether this is good or bad, then only will we come to a view," said N Srinivasan, director (finance).

"I believe it is good to become a bank and therefore we will apply - we cannot go just like that," added Srinivasan.

Murugappa Group, founded in 1900, has as many as 28 businesses such as engineering, abrasives, finance, general insurance, cycles, sugar, farm inputs, fertiliser, plantations, bio-products and nutraceuticals, among others. It has manufacturing facilities in 13 states.

The group's non-banking financial company, Cholamandalam Investment and Finance Company Ltd, increased its profit to Rs 81.51 crore during the third quarter of FY13 from Rs 40.56 crore in the year-ago period. Total income stood at Rs 669.46 crore for the quarter ended December 2012, compared to Rs 476.11 crore for the same period of previous fiscal year.

The company disbursed Rs 2,574 crore in vehicle finance during the quarter of FY13, compared to Rs 1,915 crore disbursed during the same period of FY12. It disbursed Rs 525 crore in home equity loan for the third quarter of the current financial year, up from Rs 368 crore in the year-ago period.