Indian companies may get nod to set up bank
By agencies   |   Monday, 04 September 2006, 19:30 IST
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NEW DELHI: If the Reserve Bank of India accepts the recommendations of the Tarapore Committee, Indian companies, now barred from opening or operating banks, can start commercial banks. Several business houses in India are keen on starting banks. Under the existing policy, the RBI has capped the holding of companies in banks at 10 percent. Among the groups that have evinced interest in starting banks are the Tata group and the Anil Dhirubhai Ambani group. With an aim of getting onto banking business, the Tata group started Tata Finance, a non-banking finance company. According to the Business Standard newspaper, if the RBI accepts the recommendation, Tata’s finance arm Tata Motorfinance will be the first to convert itself into a bank. Quoting sources, the newspaper said that Tata Motorfinance had last week launched a subsidiary to carry out non-banking finance operations. Besides, the group was also into retail business. "The Tata group has the vehicle to enter the banking space and it has got retail expertise. So, if allowed, it will take no time to enter the banking space," the sources pointed out. The paper said Anil Ambani too has made public his interest to enter the banking industry. Ambani is already into all segments of the financial market, except banking. He has operations in mutual funds; insurance and capital market services and recently launched an asset reconstruction outfit. In addition, he also has retail experience through his telecommunication company. "With the addition of a bank, he will offer the full range of financial services in the country," an analyst said. Global giant GE has also been trying to enter the Indian banking industry for quite some time now. Its banking subsidiary in Hungary, Budapest Bank, had last year planned to approach the RBI for a banking license, the paper said.

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