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Aditya Birla Group chairman Kumar Mangalam Birla on Friday said he was confident of getting a new banking licence. The group's non-banking financial services arm will apply for the licence and promoters will dilute their stake in the company to meet the Reserve Bank of India's (RBI) norms.
"For the licence, I am very confident about it that we will get it...I don't see any reason why we will not," Birla told reporters on the sidelines of an event organised by the Calcutta Chamber of Commerce.
All the financial services businesses of the Aditya Birla Group, other than life insurance business, are held by Aditya Birla Financial Services, which is a wholly-owned subsidiary of Aditya Birla Nuvo. On Wednesday, Aditya Birla Nuvo's board approved its plan to apply for a new banking licence.
The deadline to apply for a new banking licence expires on July 1.
"We would have to follow RBI's directions to dilute promoters' stake in a period of time. That is very clearly laid out in the guidelines. So, that is something we will just have to do," Birla said while responding to queries on promoters' shareholdings in the company.
According to RBI, private players aspiring to enter banking space needs to create a non-operative financial holding company (NOFHC). "The requirement is that not less than 51 per cent of the voting equity shares of the NOFHC shall be held by companies in the promoter group, in which the public hold not less than 51 per cent of the voting equity of such companies," RBI had said in its clarifications on final guidelines for new banking licences.
Birla said there was need to set up more banks in the country as penetration of financial services is poor in India. "That will create more inclusiveness and it is a good business proposition," he added.
The group's financial services arm has already started expanding its presence in rural geographies, one of the key conditions for new banking licence.
Separately, Birla said US has now emerged as a fairly attractive investment opportunity for manufacturers. However, he did not detail if Aditya Birla Group was planning to make fresh investments in setting up a green field unit in US.
He also did not elaborate if the company was exploring investment opportunities in any specific sector. "We are not looking at specific sector...all I was saying (in the interactive session) that US is interesting place for manufacturing but I am not saying we are looking at any specific sector as yet. US business growth is picking up, so I am upbeat about it,” Birla added.
When asked about the Group's organised retail business, he said it was tougher than he actually had thought of and margins in this business were thin. “Since we are in this business now, we will have to make it a success,” he added. Aditya Birla Group runs retail store chain under the brand—More.
