Shriram Group says interested in securing small bank licence

Chennai-based Shriram Group, which failed to secure a banking licence in the recent round of licencing, has not given up the hope and is now looking at applying for a small bank licence.

The Reserve Bank had in July issued the draft guidelines for licencing of small banks and payment banks.

"The draft guidelines for small banks have been issued and we have given our suggestions and asked for some clarifications."

"Once the RBI comes out with the final guidelines and if we know that there is an opportunity for us then we will definitely apply for it," Shriram Group director G S Sundararajan (rpt) Sundararajan told PTI.

He said the group wants to get into banking space as it would fill up the gap it has in terms of our product offerings.

In the last round of banking licencing, as many as 25 corporates, including Aditya Birla Nuvo, Bajaj Finserv, Reliance Capital, LIC Housing Finance, L&T Finance and Shriram Capital, among others had applied.

The RBI, however, gave in-principle approval only to infrastructure financing firm IDFC and micro-lender Bandhan.

G S Sundararajan (rpt) Sundararajan said his group will apply for a small bank licence only if the regulations do not affect its existing businesses.

"If we have to convert our existing NBFCs (Non-banking financial company) into the bank then we may not be interested... we will remain an NBFC only," he said.

In the previous round of granting banking licence, Shriram Capital had showed its discomfort over the regulation which insisted on merging of Shriram Transport Finance Corporation and Shriram City Union into the bank if a licence were to be issued.

Source : Economic Times