Tata withdraws application for bank licence

MUMBAI (Reuters) - Salt-to-software conglomerate Tata Sons has withdrawn its application for an Indian banking licence, but said it will look to enter the sector in future.

India is expected in January to announce the successful applicants to set up the country's first new banks in a decade.

"Tata Sons has reached a conclusion that the group's current financial services operating model best supports the current needs of the Tata group's domestic and overseas strategy," the country's biggest business house said in a statement.

Rules for new bank licences include a requirement that 25 percent of a new bank's branches be located in rural areas.

 

In June, Mahindra & Mahindra Financial Services , part of the Mahindra Group, opted not to apply for a licence, citing liquidity rules and a requirement to convert all its existing finance company branches to full-service bank offices within 18 months while at the same time setting up new rural branches.

About two-dozen licence applications are pending.

Big business houses with licence applications pending include Aditya Birla Nuvo Ltd , part of the Aditya Birla conglomerate, Reliance Capital Ltd , controlled by billionaire Anil Ambani, and L&T Finance Holdings Ltd , part of India's largest engineering conglomerate, Larsen & Toubro Ltd .

(Reporting by Swati Pandey and Swati Bhat; Editing by Louise Heavens)