Welcoming the Reserve Bank of India's (RBI) draft guidelines on granting new bank licences, corporates and analysts today said the norms would pave the way for entry of business houses into the banking space.
"We welcome the draft banking guidelines. Clearly, based on eligibility criteria, Aditya Birla Nuvo, which enjoys a significant presence across several key financial services businesses, would fit into the criteria," Aditya Birla Nuvo Chief Financial Officer Sushil Agarwal said.
Terming the paper as a well-thought out piece, analysts said the draft incorporates a lot from the consultative process held after the the discussion paper floated by the RBI in August, 2010.
"Overall, this is a good set of guidelines. They give a clear set of directions about the entry of corporates which is welcome," consultancy firm Ernst and Young's Director Viren Mehta said.
"The draft guidelines are definitely in line with the discussion paper and views expressed subsequently also have been taken into consideration," GS Sundararajan, managing director of finance company Shriram Capital, said.
He said the group will be analysing the details and looking if it can come up with a profitable model. The company's interest in banking continues, Sundararajan added.
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"The draft guidelines contain a strong focus on greater financial inclusion, efficient corporate governance, adequate controls on exposure to group companies, and time-bound milestones for listing. We now look forward to the release of the final guidelines over the next few months," Sam Ghosh, CEO, Reliance Capital, said.
"Our group will be keen to explore a banking licence. Our long experience of two decades provides us with the necessary understanding and strength in the financial services domain," diversified conglomerate Mahindra and Mahindra's President (Finance, Legal and Financial Services) Uday Phadke said.
"What is important is that they have chosen to create a level-playing field, there is nothing there which will offend an existing player," consultancy firm PricewaterhouseCoopers' Associate Director Robin Roy said.
Roy said keeping the sector's volatility in mind, the Reserve Bank has taken a view of going slow on granting licences to broking houses and realty companies.
He, however, said that things like two-year compulsory listing clause can be an uphill task for aspirants, a view endorsed by E&Y's Mehta as well.
"Listing in two years may be a challenge but I feel it can be easily done in a four-year window," Mehta said.
Meanwhile, the Religare Group expressed its keenness to enter the banking arena.
"Religare's interest in banking services... On a summary review of the draft guidelines, we believe that the Religare group qualifies for all criteria set out for applying for a new banking licence," the group said in a statement.
Industry chamber Assocham expressed reservations about the minimum 12% capital adequacy requirement for a bank in its first three years of operations.
"It will create an uneven level-playing field as this will increase the cost of funds, and thus cost of lending," its Secretary General DR Rawat said in a statement.