Open to setting up a bank, says Bajaj Finance

Meanwhile, the company is leaving no stone unturned to lay a concrete foundation for its banking forays. The non-banking finance company (NBFC) owned by the renowned Bajaj group is so far known for serving affluent customers.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead GrowMyMoney IThe Winning Leap SME Special
Moneycontrol

Home » News » Business

Jul 22, 2013, 05.13 PM | Source: Moneycontrol.com

Open to setting up a bank, says Bajaj Finance

Meanwhile, the company is leaving no stone unturned to lay a concrete foundation for its banking forays. The non-banking finance company (NBFC) owned by the renowned Bajaj group is so far known for serving affluent customers.

Like this story, share it with millions of investors on M3

Open to setting up a bank, says Bajaj Finance

Meanwhile, the company is leaving no stone unturned to lay a concrete foundation for its banking forays. The non-banking finance company (NBFC) owned by the renowned Bajaj group is so far known for serving affluent customers.

Post Your Comments

Share Cancel

Rajeev Jain (more)

MD, Bajaj Finance |

Saikat Das
moneycontrol.com

Banking is the buzz of the season. The Reserve Bank of India (RBI) has received a set of 26 applications for the new banking licence across the spectrum. If  "credible brand" remains one of the key determinants for final selection, Pune-based Bajaj Finance holds potential chances to access public savings, the cheapest source of funds for any institution.

Meanwhile, the company is leaving no stone unturned to lay a concrete foundation for its banking forays. The non-banking finance company (NBFC) owned by the renowned Bajaj group is so far known for serving affluent customers. It is considered to be India's largest white good financing company that gives loans to buy TV, fridge, air conditioner (AC), washing machine, micro oven and other appliances.

Also Read: Bajaj Finance Q1 net rises 27% to Rs 176 cr, provisions up

"We will convert Bajaj Finance into bank if RBI issues us a licence, " Rajeev Jain, CEO, Bajaj Finance told moneycontrol.com.

"As per RBI guidelines, we will have 18 months time for such conversion. We have enough the required wherewithal to do the business of banking. Through our current NBFC set-up, we are primarily serving affluent customers. However, we are trying to expand our product kitty to include more customers. We have just entered the rural markets," he said.

Bajaj Finance is the subsidiary of Bajaj Finserv , which has actually applied for a banking licence.

 In June, the company launched its financing business in rural markets with seven specialised and 30  franchised branches across Maharashtra. It plans to disburse around Rs 175-180 crore loans in the current financial year.

"We are positively surprised at the initial response. There is a significant demand from the rural population to buy LCD/LED TVs. By 2014, we will open another set of seven branches and 30 spokes (franchised units) in rural Gujarat. We will gradually expand this business, " Jain said.

With this retail initiative, Bajaj Finance made its foot-print for the first time in the rural belt. One can juxtapose the move with the RBI’s mandate of 25 percent rural branches for new banks.

The company is operating in the same product vertical (consumer durable). However, it will now be exposed to the rural masses particularly for financial products. In the auto segment, Bajaj group is already an established brand.

Must Read: RBI issues guidelines for new banking licence

Later, mopping up public deposits wherein the ‘trust’ is the key factor will not be any insurmountable task for Bajaj Finance. It can also sell other form of loans.

Earlier in January, 2013; Bajaj Finance had launched home loan products for its affluent customers, whose yearly income is not below 12 lakh.

"We are lending to those customers with an average ticket size of Rs 60-70 lakh. It goes above Rs 1 crore metro cities, "  the CEO added.

The home loan experience, according to market analysts, will add value to the NBFC, which will have to run home loan products in a large scale if they finally obtain a banking licence.

Also Read: RBI names 26 applicants for new banking licence

As of June 30, 2013; its total assets under management (AUM) stood at Rs 19,230 crore, up 33 percent year-on-year. Out of total assets, a big chunk to the tune of 40 percent is mortgaged.

saikat.das@network18online.com

Buy, Hold, Sell ? Hear it first on M3
Open to setting up a bank, says Bajaj Finance

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login