India Inc vying for banking licences

Over a dozen non-banking finance companies (NBFCs), including those of the Tatas, Birlas, Anil Dhirubhai Ambani Group and Bajaj Group, are lining up plans to seek banking licences once the Reserve Bank of India (RBI) comes up with relevant guidelines.

Over a dozen non-banking finance companies (NBFCs), including those of the Tatas, Birlas, Anil Dhirubhai Ambani Group and Bajaj Group, are lining up plans to seek banking licences once the Reserve Bank of India (RBI) comes up with relevant guidelines.

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Finance Minister Pranab Mukherjee said in his Budget speech on Friday that the RBI was planning to issue banking licences to some private sector players and NBFCs.

Executives at Tata Capital, Bajaj group and Shriram Finance said they would comment only after the RBI guidelines were in place. However, Aditya Birla Group, Reliance Cap, Muthoot and Religare welcomed the announcement.

Chanda Kochhar, chief executive officer and managing director, ICICI Bank, said it needed to be seen how the RBI formulates the procedure for giving additional licenses.

“This has come as a pleasant surprise...We would very much want to become a bank,” Aditya Birla Group Chairman Kumar Mangalam Birla said

“This is a very positive step that will accelerate the mobilisation of resources...We await further details,” Reliance Capital CEO Sam Ghosh said.