Deutsche gets NBFC licence

The Reserve Bank of India (RBI) has allowed Germany's Deutsche Bank to set up a non-banking finance company (NBFC) to undertake consumer finance business. Deutsche Bank is the first foreign bank to get an NBFC blicence after a long period.

The recent one to get an NBFC licence was HDFC Bank, which would also be doing small loans business through it. HSBC, which also wants to undertake consumer finance business through an NBFC, is still waiting for the banking regulator approval. HSBC has launched consumer finance business, under HSBC Pragati Finance, through its branch network.

Deutsche Bank, which has presence in India through 10 branches, had applied for an NBFC licence in October 2005. Apart from consumer finance, Deutsche Bank is also likely to use the NBFC to carry out investment banking and credit cards business, banking sources said.

The spokesperson of Deutsche Bank in India said, "Yes we have got a licence recently. The NBFC will be another channel for reaching out to customers. We are working on our plans and after few weeks time we will be able to share any information with you."

According to sources, Deutsche's NBFC would initially have 15 branches. Several foreign banks have acquired or taken significant stakes in existing NBFCs for getting into consumer finance. Barclays Bank has acquired Rank Investments and DBS Bank has bought a stake in Cholamandalam DBS Finance.