Missed the bus in 1990s, IFCI now says it is well placed to get a banking licence and would consider applying for it once RBI, which is expected to give nod to a few players in this space this fiscal, comes out with its norms.
Talking to reporters here, IFCI CEO and MD Atul Kumar Rai also said a factoring services arm of IFCI will come out with its IPO within nine months.
"Once RBI comes out with norms on banking licence, we will examine them and consider applying for it," Rai said.
He was here in connection with a foundation stone laying ceremony of a campus of IFCI-promoted Management Development Institute by Finance Minister Pranab Mukherjee yesterday.
Rai said IFCI missed the chance, when RBI granted licences to development financial institutions like ICICI and HDFC way back in 1993.
Long term development financial institution model later did not work for IFCI and it got into a financial mess. After converting into a NBFC, IFCI has been earning profits. It posted a profit after tax of Rs 202 crore for the second quarter this fiscal.
Earlier, in 1993, the RBI had granted licences to banks such as ICICI Bank, HDFC Bank, UTI Bank (now Axis Bank),Global Trust Bank (merged with Oriental Bank of Commerce),Times Bank (merged with HDFC Bank) and IndusInd Bank.
When asked that RBI has detailed various demerits in granting licence to NBFCs in its discussion paper, Rai said, "there are apprehensions that some NBFCs may not get licence. But we are well placed."
In its discussion paper, RBI had said there has been a light-touch regulatory framework for non-deposit taking NBFCs. "As such, the ability of the NBFC to run a bank under a heavier regulation cannot be extrapolated from this experience."
Meanwhile, Financial Services Secretary R Gopalan said recently, "RBI will issue banking licences in due course of time. We hope some of the licences will be issued this financial year."
Besides IFCI, other NBFCs eyeing the banking licence are Shriram Finance, LIC Housing and Mahindra Finance. Other players interested in banking space are Reliance Capital, Tata Group, AV Birla Group and L&T.
