IFC open to partner Religare in proposed banking foray

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SummaryIFC recently invested $75 million in Indian financial conglomerate Religare Enterprises through compulsory convertible debentures.

The International Finance Corporation (IFC), part of the World Bank Group, today said it is open to the idea of partnering with Religare Enterprises in its proposed banking foray.

IFC recently invested USD 75 million in Indian financial conglomerate Religare Enterprises through compulsory convertible debentures, which will give it 8 per cent equity stake upon conversion.

Addressing a joint conference here, Religare's Group CEO Shachindra Nath said the company will further collaborate with IFC on various new businesses, including housing finance, rural banking and other areas.

Asked whether IFC would consider partnering Religare in its proposed banking foray as well, Sergev Devieux, Director, Financial Markets-Asia, IFC, said they would be open to partnering with Religare in banking business as well as and when it happens, but it would also depend on the Indian group and other conditions at that time.

"They (Religare) can also use our expertise in their all other expansion plans, say for example outside the country," he said.

Nath said that banking was a natural progression for Religare and that the company would look to leverage IFC's expertise in all areas of developmental finance.

He added that with government's focus on financial inclusion, Religare was geared to play a big role in India's rural and semi-urban markets.

Nearly 80 per cent of Religare's locations are currently based in rural and semi-urban areas.

"Religare and IFC intend to develop a business plan focused on un-served and under-served customers in rural and semi-urban markets and deliver innovative products while providing strong financial returns to investors," Nath said.

He added that Religare and IFC will work in diverse spectrum of business including health insurance, SME financing, and collaborate actively in upcoming plans in rural banking, housing finance and so on for low income households. IFC is also nominating a member on the board of REL, whose various subsidiaries are present in businesses like life and health insurance, brokerage, asset management, investment banking, SME finance.

The group is already present in all segments of financial services except banking and general insurance, Nath said.

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