Ten years after the Reserve Bank of India issued two licences for banks, the stage is set for fresh applications from the corporate sector to join the 12 banks in the private sector.
On Friday, the bank regulator decided to remove all restrictions on eligibility of corporates and groups to apply for the new banking licence in its final guideline.
The CII has said new guidelines “indicate the high-level of trust the RBI has shown in the maturity and the ability of the Indian industry”.
The number of applications RBI is expected to recieve by July 1 is about 60-70.
In a response to The Indian Express L&T Finance Holdings, which in the past has shown its intent to apply for a banking licence, said it was in the process of studying the guidelines and would comment only after having gone through the details.
Reliance Capital showed interest in applying for a licence. “We welcome the new banking guidelines, they are forward looking and Reliance Cap will be interested in applying for the banking licence,” said Sam Ghosh, CEO, Reliance Capital.
“Banking is a logical extension of Religare’s diverse India financial services platform and we will certainly apply for a licence,” said Sunil Godhwani, CMD, Religare Enterprises.
Mahindra Finance welcomed the move on removal of suspense around participation of industrial houses.
“The suspense for Industrial Houses has ended and the guidelines clearly state that private sector, Public sector and existing NBFCs shall be eligible,” said Bharat Doshi, Chairman, M&M Financial Services. “Mahindra Finance which has strong rural presence and track record of good governance will definitely look at this opportunity after review by its Board and the Board of the parent company Mahindra & Mahindra Ltd.”
There are some who think that RBI has done well to give them sufficient time of around five months to apply for the licence.
“We intend to apply for a banking licence,” said, Ajay Srinivasan, chief executive, financial services, Aditya Birla Group. “This is a key milestone that promises to not only provide an impetus to the Indian financial services industry, but also usher a new era of financial inclusion in the country. The Aditya Birla Group remains committed to meeting all financial needs of its target customer. Towards this strategy, banking will play a key role.”
Gagan Banga CEO, Indiabulls Financial Services said that they are still studying the guidelines.