Reliance Capital, Magma Fincorp to apply for bank licence

Written by fe Bureau | Mumbai | Updated: Jun 27 2013, 06:16am hrs
Anil Ambani-led Reliance Capital and Kolkata-based NBFC Magma Fincorp said on Wednesday they will apply for bank licence.

Reliance Capital, the financial arm of the Anil Dhirubhai Ambani Group (ADAG), said it has tied up with two Japanese financial institutions Sumitomo Mitusi Trust Bank and Nippon Life Insurance for the new venture. Reliance Capital will be the promoter of the banking entity and Sumitomo and Nippon will take 4-5% stake each if the company gets licence to open a bank. Nippon Life Insurance has a 26% stake in R-Caps asset management and life insurance business.

Meanwhile, Magma Fincorp in a statement said if the company receives a bank licence, all customers will have an access to a full range of banking services leading to greater inclusion.

Reliance Capital and Magma have joined a growing list of companies that intend to apply for a bank licence before RBIs July 1 deadline. Shriram Group has also said it will apply for the licence to open a bank. L&T Finance is also reportedly considering submitting an application. M&M and Reliance Industries, however, are not keen on getting into banking business at this juncture partly due to tough conditions laid out by RBI.

Once all applications are received, an internal and external committee of RBI will examine applications before handing out licences. RBI has declined to say exactly how many licences will be issued.