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Why are there few seekers for bank licences?

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The notable absentees in the list of applicants for new banks are Mukesh Ambani’s Reliance group; Sunil Mittal’s Bharti group; the Mahindra group; and Sundaram Finance Ltd, a well known non-banking financial company (NBFC). Both Reliance and Bharti could have explored the synergy between what they do in the telecom space and banking to expand banking in hinterland.


RBI’s insistence on so-called financial inclusion—expanding banking service to the masses, the main mantra behind the issue of licences to a new set of banks—will not be a cakewalk for many. These four and many others have stayed away as they have understood it would not be easy to create value in banks that will require massive investments and the promoters will need to get out faster than what they were asked to do in 1993 and 2003. Read More

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