While
most of the 26 applicants for banking licence were usual suspects,
there were a few surprises, too. And there was at least one unusual
name, although its banking ambition was well known.
The application by the Indian postal department,
a division of the ministry of communications & information
technology, has raised some curiosity within the Reserve Bank of India (RBI). This is because RBIs new bank licence norms released in February this year talked about new bank licences in the private sector.
Since India Post is
a part of a ministry, it cannot be considered as a private sector
entity. According to RBI sources, to be eligible for a bank licence,
India Post will have to become a corporate entity, because a government
department cannot come under RBI purview. For example, if they are found
violating the know-your-customer (KYC) or anti-money laundering norms,
how can the regulator impose penalty against the sovereign, asked an RBI
official.
India Post has for long wanted to diversify into a bank and had held
discussions with RBI on this. According to experts, while the postal
departments huge rural presence definitely gives it an edge to get a
licence because both RBI and the government are emphasising on financial
inclusion.
Technically, there are challenges on whether it fulfils the prescribed
criteria but its reach definitely makes it a strong contender, sources
said.
According to the final guidelines on a new bank licence, RBI has
mandated 25 per cent of bank branches to be opened in un-banked rural
areas. New banks should also meet priority sector norms right from
inception.
Globally, there are examples of postal departments diversifying into
lending activity. Deutsche Postbank the Bonn-headquartered German
retail bank was formed from the de-merger of the postal savings
division of Deutsche Bundespost in 1990.
With around 14 million clients, 19,000 employees and total assets
amounting to ^170 billion, the Postbank Group is one of Germanys largest
financial service providers. According to its website, the lender
focuses on business with private customers as well as small and
medium-sized companies.
The 26 entities that have applied to RBI include the Tata Group, Aditya
Birla Group, the Anil Ambani Group, heavy engineering major L&T and a
host of non-banking financial companies, including a gold loan company.
Two micro finance companies have also applied.
Of the 26 applicants, there are usual suspects, but some surprises, too.
There are a few names which meet the minimum requirement, but could
rank low in terms of relative probability to get a licence. We expected a
higher number of applicants, maybe around 30-35, said Monish Shah,
senior director, Deloitte Touche Tohmatsu India.
Courtesy: Business Standard, 04th July 20
