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Economy

26 New Bank Applicants Includes Most Big Family Names, Some Unknowns

Twenty six applicants have come forward for setting up banks in India, says the RBI. The exhaustive list:

  1. Aditya Birla Nuvo Ltd., Mumbai.
  2. Bajaj Finserv Ltd., Pune.
  3. Bandhan Financial Services Pvt. Ltd., Kolkata.
  4. Department of Posts, New Delhi.
  5. Edelweiss Financial Services Limited, Mumbai.
  6. IDFC Limited, Mumbai.
  7. IFCI Limited, New Delhi.
  8. Indiabulls Housing Finance Limited, New Delhi.
  9. India Infoline Ltd., Mumbai.
  10. INMACS Management Services Limited, Gurgaon.
  11. Janalakshmi Financial Services Pvt. Ltd., Bangalore.
  12. J M Financial Limited, Mumbai. 
  13. LIC Housing Finance Ltd., Mumbai.
  14. L & T Finance Holdings Limited, Mumbai.
  15. Magma Fincorp Limited, Kolkata.
  16. Muthoot Finance Limited, Kochi.
  17. Reliance Capital Limited, Mumbai.
  18. Religare Enterprises Limited, New Delhi.
  19. Shriram Capital Limited, Chennai.
  20. Smart Global Ventures Pvt. Ltd., Noida.
  21. SREI Infrastructure Finance Limited, Kolkata.
  22. Suryamani Financing Company Limited, Kolkata.
  23. TATA Sons Limited, Mumbai.
  24. Tourism Finance Corporation of India Limited, New Delhi.
  25. UAE Exchange & Financial Services Ltd., Kochi.
  26. Value Industries Limited, Aurangabad.

Old Industrialist Families: The Tatas, Birlas, Reliance, Shriram and Bajaj are represented. Even Religare is one here.

Brokers and Financiers: India Infoline and Edelweiss are largely brokers. JM Financial, IndiaBulls Housing Finance, L&T Finance, Magma, Muthoot, SREI, LIC Housing Finance and others are financiers. 

Institutions: The Department of Posts is one that will be very interesting if it gets the status. And then, there’s IDFC, IFCI and the Tourism Finance Corporation.

Those you haven’t heard of: Value Industries, Suryamani, Bandhan, INMACS and “Smart Global Ventures” are  names that I haven’t really heard of. (Sharp commenter Gaurav points out that Value is actually a Videocon company, so an “industrial family” that joins the list)

Absent are the Mahindras who said they won’t participate, and the microfinance companies. (Astute commenter Rahul notes that Bandhan is a microfinance company)

Will all of them be given licenses? I don’t think so. The unknown names are likely to be delayed for now, while the industrial families may have to wait before institutions. Brokers might never get one, but within the financiers some indeed look like they have the experience with lending and deposits.

It’ll be a long wait before these guys waltz in and take away business from the current lot. I hope whoever is chosen takes a good long look at technology to really improve banking. But the burden of banking for those with already successful lending businesses will be big, with SLR and CRR and priority sector lending and branch restrictions and so on. Will this lead to more rejections or withdrawals? Time will tell.

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