Focusing on rebuilding NBFC: Cholamandalam DBS

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There has been a lot of excitement in non-banking financial companies (NBFCs) after the Budget since the possibility of banking licence is being accorded to some of them. In an interview with CNBC-TV18, N Srinivasan, Director-Finance at Cholamandalam DBS, spoke about whether the company is inline for it.

Here is a verbatim transcript of an exclusive interview with N Srinivasan on CNBC-TV18. Also watch the accompanying video.

Q: Would you be keen on a banking licence? Do you think you fit the bill?

A: We are awaiting the guidelines. However, at this point of time we are focusing on rebuilding our NBFC.

Q: Are you comfortable with being an NBFC at this point?

A: Yes, we are comfortable with NBFC at this point. Once the Reserve Bank of India's (RBI) guidelines are out it will be examined at the board level then probably we can revert more with clarity.

Q: What structure is Cholamandalam aspiring for with its NBFC because it got out of the asset management business recently? What is the core proposition that you want to be left with?

A: Asset management was a separate business and NBFC was only a sponsor. As NBFC, we were doing asset financing and consumer loans. Last year we stopped doing consumer loans and came out of that business. Right now we will focus on retail finance, home loans and corporate mortgage finance which we have been doing for long. So we continue to grow these three verticals.

Q: You had some fund raising plan in January. Where does that stand now, it was most debt?

A: We have raised only the need based debt fund whatever is required for disbursement commitment.

Q: From the areas that you mentioned it would appear that if you did get banking licence your cost of funds could have come down quit significantly, do you do agree with that?

A: There are several pros and cons which we need to examine in the long-term interest of the company. What is the competitive advantage, what will be the capital, what will be the shareholding pattern? So we need to examine several aspects before we come to a view on this.