Pai, Ramanathan, NRN: Will diverse applications change Indian banking?

Even though the tough guidelines set by the Reserve Bank of India for granting banking licences is likely to keep several aspirants out of the fray, a few India Inc professionals with stellar records and some with banking experience might win some brownie points with the central bank which is likely to show a bias towards corporates with good track record in corporate governance and deep pockets.

A report in the Economic Times today said Mohandas Pai, a chartered accountant who was head of finance and human resources at Infosys, former Citibank executive Ramesh Ramanathan who now runs an urban micro finance company Janalakshmi and even NR Narayana Murthy, the Infosys founder have expressed interest in starting a bank.

For Pai, who is currently backing the Manipal Education & Medical Group, where he heads the global education services arm, a banking licence means going back to his roots as his family had once owned Syndicate Bank but was forced to give it up when banks were nationalised in 1969.

More from Business

Hyundai India’s Rs 27,870 crore IPO oversubscribed by 2.28X, largely driven by institutional investors How Indian fintech startups are driving Malaysia’s UPI-like digital payments revolution

Ramanathan, on the other hand, wants to start a bank to supplement his ventures in affordable housing and microfinance. He has already raised Rs 200 crore and plans on raising the remaining Rs 300 crore in the next few months to meet the capital adequacy norms of Rs 500 crore for a banking licence.

The entry of finance professionals is bound to make the banking sector interesting since it will also usher in new wave of technical know-how.

[caption id=“attachment_641913” align=“alignleft” width=“380”] The entry of finance professionals is bound to make the banking sector interesting since it will also usher in new wave of technical know-how. Reuters[/caption]

Impact Shorts

More Shorts

Chennai Ranks #1 in Challan Checks: ACKO Insights for Smarter Car and Two Wheeler Insurance Decisions

Tata Harrier EV vs Mahindra XEV 9e: Design and road presence compared

Already a bunch of bigwigs like the Birlas, Ambanis, L&T, Mahindra and LIC are planning to apply to the Reserve Bank for licence to open banks. But given the stringent norms, the RBI will ensure that there is a level playing field for new comers and the market remains competitive and not over-crowded.

And instead of large corporate houses, it has provided enough scope to give out new bank licences to microfinance institutions and non-bank financial companies with a strong track record, and to financial sector professionals with the capital to start a bank.