NBFCs ask for bank permits
Non-Banking Finance Companies (NBFCs) today pleaded their case for banking licences in a meeting organised by the Reserve Bank of India and stressed that they were better placed than big industrial houses to run banks, HT reports.business Updated: Oct 07, 2010 23:31 IST
Non-Banking Finance Companies (NBFCs) on Thursday pleaded their case for banking licences in a meeting organised by the Reserve Bank of India and stressed that they were better placed than big industrial houses to run banks.
“NBFCs stand a better chance than big industrial houses to be converted into banks because we have a financial track record and we are already doing business in the rural and semi-urban areas, which is exactly what RBI wants,” said Mahesh Thakkar, director general, Finance Industry Development Council, which represents the NBFC sector, after attending the meeting.
NBFCs are financial institutions that provide banking services without meeting the legal definition of a bank.
RBI on Thursday met representatives of Confederation of Indian Industry, Finance Industry Development Council and Indian Banks’ Association (IBA) and bankers to discuss modalities for granting new banking licences to business houses and NBFCs.
In August, the apex bank had floated a discussion paper on new banking licences and regulations for granting them to foster greater competition.
NBFCs feel capital adequacy will not be a hurdle. “Whatever requirements are needed, we all are willing to fulfill,” said Thakkar. “Currently the capital adequacy is R500 crore and, in future, if RBI wants to increase it in a phased manner, we are ready to go up to R1000 crore,” he added.
According to sources, Tata Capital, Mahindra Finance, Reliance Capital, IndiaBulls, Religare, IL&FS and Aditya Birla Financial Services are willing to enter the banking sector.