Banking licence: Waiting for final RBI guidelines, says LT

The Banking Amendment Bill , major reform legislation, got approval of the Lok Sabha on Tuesday. The government dropped the controversial provisions relating to allowing banks to trade in futures.

Also read: L&T Finance, Bajaj Finance rally post Banking Bill cleared

L&T Finance Holdings , a group company of Larsen & Toubro , is a good candidate to qualify for a banking licence.

In an interview to CNBC-TV18, R Shankar Raman, chief financial officer, L&T says clearance of Banking Bill is a positive.

Raman is positive on aspect of applying for a bank licence. However, he says, the company still need to wait for final RBI guidelines before applying for a licence.

Q: What is your view on the banking license bill and how aggressively will L&T look at applying for it through its arm L&T Finance? Are you keen on going the bank way and will you look to do that once the RBI issues guidelines to the effect?

A: The development is positive but we still need to wait and watch what the guideline will outline. Financial services are an important part of our business portfolio and it is doing well and banking is an area of interest considering natural extension of all its offering.

Q: Do you feel that you have a good case to get a banking license?

A: I think we have stayed positive on this aspect. We are straddling the retail credit, rural credit and institutional credit. Our company has presence in the mutual fund space, general insurance. So, if you look at the breadth of our aspirations in financial services as a investor company, L&T is quite happy the way things have rolled out so far and the progress that the company has made.

So, nothing suggests that we need to be bearish on the whole thing. But unless we see the details of the guidelines it is difficult to come to a conclusion. The parent, L&T has to decide how it fits into its overall game plan. It is a positive and a welcome move.

 

More to come.