Tata sons informed RBI and indicted that, its current model best supports the needs of the group’s domestic and overseas strategy
Tata Sons, the holding company of the India’s largest, $100 billion conglomerate Tata Group, has withdrawn its application of new banking licence.
In a release, Reserve Bank of India (RBI) said Tata Sons has withdrawn its application made on 1 July 2013 for new bank licence and the central bank has accepted withdrawal of the application.
“The company has indicated that its current financial services operating model best supports the needs of the Tata group’s domestic and overseas strategy, and provides adequate operating flexibility to its companies, while securing the interests of the group’s diverse stakeholder base,” the release stated.
Tata Sons in a statement said, "Tata Sons remains committed to financial inclusion and believes that the group’s existing financial services footprint uniquely positions it to provide technology excellence and access to India’s hinterland. The company shall continue to monitor developments in this space with great interest and looks forward to participating in the banking sector at an appropriate time".
Earlier last week, speaking at BANCON 2013 in Mumbai, finance minister P Chidambaram had said, “In January 2014 new banking licenses will be issued and I wish it would be given to banks with innovative or different models of banking. We need different kinds of banks to cater to different segments in our country. And I would regret if 'clone' banks are given new licences”.
In February, the RBI released guidelines to allow corporate houses to form banks, part of an effort to expand access to financial services in a country where only about half the population has a bank account. With this effect total 26 corporate firms applied for banking licence including big conglomerates like Aditya Birla Nuvo, Bajaj Finance, L&T Finance, and Reliance Capital.
After Tata’s withdrawal Bank licence application count comes to 25. The winners of banking licence are expected to be announced by the first quarter of 2014.
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