Shriram Transport to seek banking licence

Shriram Transport Finance, an Indian truck financier backed by Fidelity Investments, will apply for a banking license as the country seeks to extend lending facilities to villages.

The company, which financed more than 1,200 vehicle purchases daily, expected profit for the year ending March to increase 25 per cent as faster economic growth bolstered demand, Managing Director R Sridhar said. The Reserve Bank of India (RBI) may issue new banking licenses for the first time since 2004. “With a bank license we will be able to reach out to a lot more people which the government directly can’t,” Sridhar said.

“We will be able to provide credit to the cash-starved while strengthening our objectives and positioning,” he added.

Shares of the company, which have gained 78 per cent this year, rose 0.1 per cent to Rs 871 at 1:34 pm in Mumbai. That compares with a 20 per cent gain in the benchmark BSE Sensex in the same period.