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Suryamani Financing Company’s application for a banking licence might have surprised a few but Ruia Group Chairman Pawan Kumar Ruia, whose family owns the non-banking financial company (NBFC), says his group has always aspired for a bank. In an interview with Probal Basak and Somasroy Chakraborty, he outlines Suryamani’s plan to open a bank. Edited excerpts:
When did you decide to apply for a banking licence?
This thought was there in my mind since the very beginning. Being a chartered account, this is my ultimate aim. I always thought, given an opportunity, we would foray into the banking sector. Even in 2003-04 (when banking licences were offered), we were interested. At that time, however, our group’s position did not warrant the move.
Are you confident of securing a banking licence?
We never thought in that direction. We certainly think we are eligible to set up a bank. Now, it is up to the Reserve Bank of India (RBI) and the finance ministry to decide whether we are the right candidate for a licence.
In January, the Calcutta High Court had ordered the winding up of Dunlop India, your group’s flagship company. Given RBI’s fit-and-proper criteria, would this hit your plans for a banking licence?
My opinion is the affairs in Dunlop have nothing to do with this particular matter. I feel I have been prosecuted wrongly (by the Calcutta High Court). I have appealed and secured a stay (from the Supreme Court). In this country, the easiest thing to do is to file a case against somebody. I don’t think the affairs in Dunlop would come in the way of my future businesses. If it was so, banking aside, I wouldn’t be able to do any business. Have I done any crime or anything wrong? If the perception (of the Ruia Group) became bad because there was a winding-up order, it should change now, as there is a stay on that order.
For the bank, would you use any of your existing brands, such as Dunlop?
We will not use any existing brand. I don’t think it would go well. Banking is completely different from a trading business. In banking, you are dealing with public money. If I had any of my brands in the financial services space, I would have considered using it for the bank. We will have a completely different brand.
Why did you choose Suryamani Financing to promote the proposed bank?
It is an NBFC, with a net worth of Rs 300 crore. We chose it because it already had an NBFC licence, as well as experience in the financing business. It was our best option.
Will you partner any other group or individual for your banking business?
Suryamani Financing will promote the holding company. But there will be other people or groups joining us, because according to rules, shareholding has to be diversified. We are yet to identify a partner.
Did you appoint a consultant and hire bankers for your banking foray?
We did not appoint any consultant, though we had initially thought of doing so. If we approach one a reputed consultant to formulate our banking strategy, would our strategy be different from those who have also approached consultants? The strategy has to be decided by the promoter; consultants can only offer guidance. We have hired three/four former bank chairmen to guide us. Three senior people from our group have also been involved.
In case you secure a banking licence, what would be your strategy?
The bank wouldn’t be headquartered in Kolkata or Mumbai. For the bank’s headquarters, we will look at other states in the east. We are not very keen on increasing branches significantly, at an early stage. Banking is not like any other business in which you can march forward aggressively. So, in the beginning, we would have a limited number of branches. The focus would be on rural banking. There are a lot of ideas, but we would discuss those in detail after getting the entry card.
When did you decide to apply for a banking licence?
This thought was there in my mind since the very beginning. Being a chartered account, this is my ultimate aim. I always thought, given an opportunity, we would foray into the banking sector. Even in 2003-04 (when banking licences were offered), we were interested. At that time, however, our group’s position did not warrant the move.
Are you confident of securing a banking licence?
We never thought in that direction. We certainly think we are eligible to set up a bank. Now, it is up to the Reserve Bank of India (RBI) and the finance ministry to decide whether we are the right candidate for a licence.
In January, the Calcutta High Court had ordered the winding up of Dunlop India, your group’s flagship company. Given RBI’s fit-and-proper criteria, would this hit your plans for a banking licence?
My opinion is the affairs in Dunlop have nothing to do with this particular matter. I feel I have been prosecuted wrongly (by the Calcutta High Court). I have appealed and secured a stay (from the Supreme Court). In this country, the easiest thing to do is to file a case against somebody. I don’t think the affairs in Dunlop would come in the way of my future businesses. If it was so, banking aside, I wouldn’t be able to do any business. Have I done any crime or anything wrong? If the perception (of the Ruia Group) became bad because there was a winding-up order, it should change now, as there is a stay on that order.
For the bank, would you use any of your existing brands, such as Dunlop?
We will not use any existing brand. I don’t think it would go well. Banking is completely different from a trading business. In banking, you are dealing with public money. If I had any of my brands in the financial services space, I would have considered using it for the bank. We will have a completely different brand.
Why did you choose Suryamani Financing to promote the proposed bank?
It is an NBFC, with a net worth of Rs 300 crore. We chose it because it already had an NBFC licence, as well as experience in the financing business. It was our best option.
Will you partner any other group or individual for your banking business?
Suryamani Financing will promote the holding company. But there will be other people or groups joining us, because according to rules, shareholding has to be diversified. We are yet to identify a partner.
Did you appoint a consultant and hire bankers for your banking foray?
We did not appoint any consultant, though we had initially thought of doing so. If we approach one a reputed consultant to formulate our banking strategy, would our strategy be different from those who have also approached consultants? The strategy has to be decided by the promoter; consultants can only offer guidance. We have hired three/four former bank chairmen to guide us. Three senior people from our group have also been involved.
In case you secure a banking licence, what would be your strategy?
The bank wouldn’t be headquartered in Kolkata or Mumbai. For the bank’s headquarters, we will look at other states in the east. We are not very keen on increasing branches significantly, at an early stage. Banking is not like any other business in which you can march forward aggressively. So, in the beginning, we would have a limited number of branches. The focus would be on rural banking. There are a lot of ideas, but we would discuss those in detail after getting the entry card.
