Religare Enterprise's group CEO Shachindra Nath, explains on CNBC-TV18, that the company stands a high chance of being granted a licence as it has Rs, 13,000 crore in assets and is focused on the SME sector.
The Parliament recently amended the Banking Bill to allow RBI to give corporate entities offering financial and banking services, new banking licences. The first new bank licence will perhaps be issued in 12-18 months' time.
Religare is one of the corporate entities that has announced its intention of applying for a banking licence. Religare Enterprises' group CEO Shachindra Nath, explains on CNBC-TV18, that the company stands a high chance of being granted a licence as it has Rs, 13,000 crore in assets and is focused on the SME sector.
Below is the edited transcript of the interview on CNBC-TV18
Q: Since the Parliament amended the Banking Bill, have you had any discussion with the Reserve Bank of India (RBI) on the guidelines as far as the licences are concerned? Where do things currently stand and what is your understanding?
A: No, not yet. In our view, we will continue to wait for the final guidelines. We would like to formally interact with the RBI once we have seen the final guidelines and we know we can align a business model which allows us to apply formerly to the RBI. As of now we have had no communication with them.
Q: The intention of RBI and the government is to improve the penetration of banking in India. So, why do you think that you make a strong case for getting one of the new banking licences that will be issued?
A: We stand a good chance because of the fact that Religare runs an NBFC with an asset side of more than Rs 13,000 crore and a substantial portion of that is geared towards SME. Also, Religare's board is independent; there is no involvement of promoters into that business. In last 10 years, we have built multiple businesses which are fiduciary in nature.
Q: We also understand that NBFCs may get preference when it comes to the applications being considered. Who do you believe your toughest competition is going to be? NBFCs like Shriram Transport, Indiabulls for example are bigger than you so where do you stand in the pecking order, who do you regard as your biggest competitor?
A: There is no pecking order. If one looks at the size of NBFC, we are among the top five, six NBFCs purely in terms of the asset size per se. How the pecking order would be defined is only going to be judged by the regulator.
But what they would be very keen to understand is how do you run your business, how you have effectively created the governance model, what's the experience of the management, do you have the ability to run large sized business in fiduciary capacity? We have done all of this for a number of years and we are very successful.