IDFC rises after RBI grants banking licence

MUMBAI (Reuters) - Shares in IDFC Ltd rise after the Reserve Bank of India on Wednesday granted preliminary licence to the infrastructure sector lender to set up a new bank.

The approval of licences for IDFC Ltd and Bandhan Financial Services marks the start of a cautious experiment for a sector dominated by lethargic state lenders, many of which are reluctant to expand into rural areas or towns where banking penetration is low.

No new Indian bank has been formed since Yes Bank in 2004.

IDFC shares were up 1.5 percent at 10:41 a.m.

Other companies hopeful of bank licence slumped: LIC Housing Finance fell 2.5 percent while L&T Finance Holdings lost 8.3 percent.

 

(Reporting by Abhishek Vishnoi; Editing by Gopakumar Warrier)