Tata, Birla, Bajaj & Piramal Finance Interested In Getting Into Banking

Top Indian conglomerates led by Tata, Birla, Piramal, and Bajaj will seek a banking licence provided the norms for conversion of non-banking finance companies (NBFCs) are made easier and comprehensive regulation does not apply to rest of the group firms.

BY Realty Plus
Published - Wednesday, 25 Nov, 2020

Tata, Birla, Bajaj & Piramal Finance Interested In Getting Into Banking

Top Indian conglomerates led by Tata, Birla, Piramal, and Bajaj will seek a banking licence provided the norms for conversion of non-banking finance companies (NBFCs) are made easier and comprehensive regulation does not apply to rest of the group firms. A Reserve Bank of India (RBI) panel had recommended giving banking licenses to large industrial houses, allowing them to apply for banking licenses. The panel has also suggested that large non-bank lenders with asset sizes of more than ?50,000 crore, including those owned by corporates, should be considered for conversion into banks, provided they have completed 10 years of operation. The panel also suggested raising the cap on promoter stake in private sector banks to 26% of the paid-up equity after 15 years of operation. Existing norms mandate private bank promoters to cut their ownership to 40% within three years and to 15% in 15 years. The panel suggested bringing down the promoter holding to below 26% any time after the first five years of lock-in. For non-promoter shareholding, the current long-run shareholding guidelines may be replaced by a simple cap of 15% of the paid-up voting equity share capital of the bank, While the big guns are leading the race for banking license, they say it is too early to elaborate as only recommendations are out and work is in nascent stage.