RIL To Apply For Bank License
Filed Under: Business | Posted: 02/25/2013 at 4:22AM
Comments | Region: India
Mukesh Ambani, Chairman and Managing Director of RIL (Reliance Industries Limited) and the country’s most renowned business tycoon, is keen on foraying in the banking sector. The conglomerate may possibly apply for banking license in the wake of the reforms announced by Reserve Bank of India on Friday, wherein it permits corporate players to enter the sector.
Taking into consideration the present guidelines, Reliance Industries is eligible to apply for the same as it meets all the criteria and conditions, announced. Sources who are aware of the development revealed that the company reckons financial services as a lucrative business and hence, tops the Mukesh Ambani’s agenda. A number of factors give the company an edge to win the license, over others. Its huge reserves, the size and value of its business, the status it has attained globally as a brand, and the fact that Mukesh Ambani serves as the director on the board of America , boosts the chances of RIL to attain the license. Earlier in 2011, RIL and DE Shaw had set the ball rolling by announcing a joint venture to deploy a financial business service in the country. However, the regulatory approvals have been taking a lot of time and the company has been awaiting the approval, since then.
The conglomerate is highly ambitious about the finance sector and will hence reserve all its funds and time to the business. In an attempt to streamline its activities, Reliance Industries sold out a part of its share in the Haryana SEZ, to IL& FS.
The RBI in its reformed norms permits the participation of both private and public sector entities and non–banking finance companies in the banking sector, provided they have a healthy financial background, good reputation, and proper credentials. The norms also make it mandatory for the company to be in contact with its promoter’s group, listing and catering to the rural areas by having branches over there.
The objective of the reforms was to open banking sector to the masses without the need for bank accounts. The new norms will also intensify the competition in the market and bring in fresh capital unlike the present scenario where state lenders control it and cater to only half of Indian households. Applicants, apart from RIL, include Aditya Birla Group, L & T Group, Mahindra Group, etc.
Other than the financial sector, Reliance Industries eyes the telecom sector, and intends to gain ground, by rolling out 4G services.