3 NBFCs likely to get RBI nod for banking license: Antique

Moneycontrol Bureau

Brokerage house Antique Stock Broking is of the view that L&T Finance Holding, Shriram Group and Mahindra & Mahindra Financial Services have a strong chance of getting the Reserve Bank of India's approval to start banking operations.

Financial inclusion, professional management, priority sector lending, track record and ease of complying with the RBI-proposed holding company structure are some of the parameters considered in arriving at this conclusion.

Antique has listed Bajaj Finserv, Aditya Birla Nuvo and Tata Capital as the other key contenders.

"The guidelines do not specify the number of licenses but given the past record and the RBI's cautious approach, we believe a maximum of three or four licenses would be granted," the brokerage said in a note today.

"The existing set of guidelines clearly eliminates chances of groups engaged in broking and real-estate activities as contenders - it offers adequate flexibility to RBI for 'choosing' the promoters of new banks. RBI has also kept subjectivity in lots of cases (like diversified ownership, professional management, feedback from regulators Tax, CBI, ED etc., coupled with assessment of business plan with regard to financial inclusion); these subjectivity will help RBI to keep final discretion in granting the licenses,” the note says.

RBI will issue the new licenses only once the Banking Laws (Amendment) Bill is approved by the Parliament. The Bill is currently being debated in the parliament. On Monday, the BJP-led opposition forced an adjournment citing inclusion of new clauses, which were not part of the original amendments studied by the standing committee on finance.