Aiming to set up a bank once regulations allow it to do so, the Shriram Group has started reshuffling its top deck.
The group is positioning G S Sundararajan, one of the managing directors in Shriram Capital, to head its banking foray. At the same time, Shriram Transport Finance (STFC) managing director, R Sridhar, is relocating to Chennai to join as Shriram Capital’s third managing director. D V Ravi is the other managing director in Shriram Capital, which is expected to be the holding company for the bank.
Sridhar would be replaced by U Revankar, currently the deputy managing director of Shriram Transport Finance. R Duravasan, managing director, Shriram Life Insurance, is expected to head Shriram City Union Finance (SCUF) after R Kannan, its managing director and one of the group’s senior directors, retires in March.
“All this reshuffling is being done, keeping the banking foray in mind. G S Sundararajan would be relieved from the day-to-day responsibilities of Shriram Capital, as he would formulate the key strategies and plans for the banking business. Once the group’s banking foray takes shape, it plans to ask Sundararajan, former CitiBanker, to head the bank,” said a senior Shriram Group official, requesting anonymity. The group has already put in place a team to study the draft guidelines and formulate a road map for its banking foray. It would take up certain issues with the regulators relating to the type of business that might come under the purview of the banking activities, profitability and the listing of the new bank.
In another major strategic decision, the Chennai-based group has also decided Shriram Capital would be the entity that would promote the bank. “It was always between Shriram Transport and Shriram Capital from the beginning. However, keeping the regulatory norms in mind, we have decided Shriram Capital would be the promoter for the bank,” the official said. The draft norms of new banking licences emphasise on a non-operative holding company structure for banks.
Shriram Capital is the holding company of Chennai-based Shriram Group's financial services and insurance business. It promotes seven companies, including Shriram Transport Finance Company Ltd, an asset financing company, consumer finance company Shriram City Union Finance, and Shriram Life Insurance Company.
When contacted, Sundararajan declined to comment on any specific appointment, but said the official announcement would be made in April. However, he said the group was eagerly awaiting the final guidelines before finalising the plans for the banking foray. “We are waiting for the final guidelines on banking licences. As we have said earlier, we are keen to float a bank. But to do that, we need have some clarity on certain aspects,” he said.
In August, the Reserve Bank of India had come out with the draft guidelines on new bank licences. The regulator had said a non-banking financial company would be allowed to convert itself into a bank if all its activities fell under the purview of banking.
Besides, the guidelines also recommended that new banks should have one-fourth of its branches in unbanked areas and that it should be listed within a couple of years of operations.