After R-Cap,Aditya Birla Group,Magma Fincorp joins the queue for banking permit

With less than a week left for submission of applications,the race for bank permits gets hotter

Written by ENS Economic Bureau | New Delhi | Published: June 27, 2013 3:19 am

With less than a week left for submission of applications,the race for bank permits gets hotter. Anil Ambani-led Reliance Capital,today,announced plans to apply for a banking licence with Japan’s Sumitomo Mitsui Trust Bank and Nippon Life Insurance as strategic partners.

“Reliance Capital Limited,a part of the Reliance Group,announced that it will be submitting an application for a banking license with the Reserve Bank of India (RBI). Reliance Capital will be the promoter of the proposed new bank,” the company said in a statement. According to the proposal,the two Japanese firms would own 4 to 5 per cent stake in the proposed bank. Sumitomo Mitsui Trust Bank is one of the largest banks in Japan,while Nippon Life Insurance is among Asia’s largest financial services company and already has strategic stakes in Reliance Capital’s life insurance and mutual fund units.

Shares of Reliance Capital gained by 2.08 per cent on the BSE and closed at Rs 320.70 apiece.

The announcement came a day after Aditya Birla Group had also said it would be applying for a bank permit after getting approval from its board. “The banking licence guidelines are very clear. They are not discriminatory towards large corporate houses,” Aditya Birla Group chairman Kumar Mangalam Birla told reporters on the sidelines of a conference organised by Ficci in Mumbai. His comments come after Mahindra Finance’s announcement that it would not apply for a bank permit as they felt the RBI guidelines were too strict for a non-banking finance company.

Meanwhile,Magma Fincorp Ltd has said it will apply to RBI for seeking a bank licence. The board of the company has approved the proposal of making an application to the RBI for seeking bank licence,the firm said in a statement.

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