Tourism Fin Corp to submit application for setting up bank

Tourism Finance Corporation of India Ltd (TFCI) today said the board has approved a proposal to seek licence from RBI for setting up a bank.

"TFCI, in terms of the approval by the board of directors, is submitting application with Reserve Bank of India for banking licence," the company said in a filing on the Bombay Stock Exchange. Industrial Finance Corporation of India Ltd (IFCI) is the majority owner of the TFCI with 42.50 per cent stake while State Bank of India, LIC and Bank of India has 9.19 per cent, 7.70 per cent and 4.70 per cent, respectively.

TFCI function as a specialised all-India development financial institution to cater to the financial needs of tourism industry. Shares of the company closed at Rs 22.25 per unit, down by 1.1 per cent on the BSE.

Earlier this month, RBI while issuing clarification on new bank licence guidelines said, the entities getting licences to open new banks will be given 18 months to open branches against 12 months prescribed earlier, and promoters would have to transfer their holdings to the non-operative financial holding company (NOFHC) in a stipulated period.

The NOFHC envisages holding of the bank and other regulated financial services entities of the promoters under the NOFHC and prudential exposure norms for the regulated entities. India has 26 public sector banks, 22 private sector banks and 56 regional rural banks.

Ten banks were licenced on the basis of guidelines issued in January 1993. The guidelines were revised in January 2001 based on the experience gained from the functioning of these banks, and fresh applications were invited. Of the 10 licences issued in 1993, four banks merged with other lenders over a period of time. Times Bank merged with HDFC Bank, while Global Trust Bank was amalgamated with the state-owned Oriental Bank of Commerce. Centurion Bank took over Bank of Punjab to become Centurion Bank of Punjab, which merged with HDFC Bank in 2008.