A number of surpise entrants including gold loan company Muthoot Finance and India's postal department — India Post — have joined the Tatas and the Birlas in the race to acquire banking licences.
As the Reserve Bank of India’s (RBI’s) July 1 deadline for sending applications ended, at least 25 companies were confirmed to have applied for licences, even though official sources indicated that only five to six new licences would be issued and that the process may take six to eight months .
India Post, which has 90% of its 154,822 branches in rural areas, is likely to one of the main contenders. RBI norms make it compulsory for new lenders to have at least a quarter of their branches outside cities.
According to RBI data, around 480 million of India's population living in villages currently have no banking access.
Established private sector groups that have applied for a licence include Tata Sons, Aditya Birla Nuvo, Muthoot Finance, L&T Finance, Religare Enterprises, Reliance Capital, Edelweiss Financial and SREI Infrastructure Finance. They face strong regulatory checks to separate banking from other businesses. Among public sector giants India Post, Power Finance Corporation (PFC) have evinced interest in entering the banking space.
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