Tata, Birla, Ambani... all the marquee names of India Inc
want to float a bank.
The Reserve Bank of India (RBI) said it has received 26
applications from industrial houses such as Tata Sons, public sector units and
non-banking financial companies for bank licenses, the last of which were
handed out a decade ago.
India Posts has also applied, perhaps offering the most
compelling case in terms of network — something that can overwhelm the spread
of State Bank of India, India’s biggest commercial lender.
The RBI was earlier not too keen to hand out licenses to
companies with exposure to broking or real estate. However, these restrictions
were removed in its final guidelines.
The RBI is expected to give not more than two to three
licenses before the end of this financial year.
Several industrial houses have applied through their NBFC
arms. These include Reliance Capital steered by Anil Ambani, Aditya Birla Nuvo
run by Kumar Mangalam Birla, Indiabulls Housing Finance and Bajaj Finserv.
Videocon Group applied through its arm Value Industries,
while the Pawan Ruia Group, which owns tyremaker Dunlop in India, has applied
through Suryamani Financing Company.
Micro financiers such as Bandhan Financial Services and
Janalakshmi Financial Services have also applied for a licence.
Among companies with a sizable exposure to capital markets,
India Infoline and Edelweiss Financial Services have applied.
The guidelines to set up a new bank need 10 years of
financially sound and successful track record and minimum paid-up equity
capital of Rs.500 crores. The new bank must have at least 25% branches in
non-banked rural areas and get listed in three years.
RBI opened window for new banks after a decade of granting licenses
to Yes Bank and Kotak Mahindra Bank. There were few others who were granted the
license to set up a bank but they failed.
Among the more unknown names are UAE Exchange & Financial
Services, a remittance company and INMACS Management Services, a consulting and
advisory firm.
Mahindra & Mahindra Financial Services opted out of the
race last week saying the guidelines were too tough and expensive for NBFCs.
