Customer base helps NBFCs in bank licence application: Chakrabarty

Mumbai: Non-banking finance companies (NBFCs) have advantage over other applicants for banking licences as they already have good customer base, [caption id=“attachment_1162945” align=“alignleft” width=“380”]  Reserve Bank deputy governor KC Chakrabarty.[/caption] said today.

“NBFCs have one advantage that they have customer base. If they get the licence they can convert themselves into banks,” he said when asked whether NBFCs will get a priority in terms of bank licenses.

“But how it will be done, what are the other factors, I don’t know because a separate committee has been appointed (to award licences),” he added after inaugurating Kotak Mahindra Bank’s 500th branch in Mumbai.

The RBI has received 26 applications for new banking licence from corporates like Tata Group, Aditya Birla, Anil Ambani’s Reliance Group and Bajaj Group apart from India Post. Around a dozen NBFCs are also in the race.

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Last week Governor Raghuram Rajan appointed former RBI deputy governor Usha Thorat, ex-Sebi chairman CB Bhave and the apex bank’s Central Board member Nachiket Mor as members of the external committee, which will screen the list of applicants. The panel is headed by ex-RBI chief Bimal Jalan.

Meanwhile, Kotak Mahindra Bank executive vice-chairman and managing director Uday Kotak said the private lender is planning to open 500 more branches in the next three years.

“We are at 500th branch and in less than three years we will open 500 more of which 100 will be opened this fiscal, taking our branches to 600 by March-end,” Kotak said.

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On PSU banks getting government funds for lending to consumers, he said, “Capital is not funding for lending. Capital is capital. For funding, for lending, as the deputy governor said, they will offer the window to all banks. If they give us special window we will also transmit to consumers.”

On the impact of his cost of funds after RBI brought down the MSF rates in two instalments, Kotak said, “We are seeing 30-40 basis points relief from the peak.”

RBI on Tuesday cut the marginal standing facility (MSF) rate, at which it lends emergency funds to banks, by 0.5 percent to 9 percent with an aim to improve liquidity and boost economic activities.

PTI