IIFL group pitches for banking entry

Tags: Banking, IIFL
The IIFL group has made a strong pitch for letting brokerages enter the banking fray, saying its success with 4,000-odd branches gives it the necessary bandwidth to replicate the same in commercial banking.

"I am confident that we at the IIFL, with our over a decade of experience and a nationwide footprint, can replicate the success we have had in the financial services space, in the banking arena, too, if the RBI allows us to enter the space.

"I am confident each of our over 4,000 branches spanning 900 locations can be converted into a bank," IIFL group Chairman Nirmal Jain told PTI here.

The city-based brokerage and NBFC player is keen on applying for banking licence as soon as the Reserve Bank invites applications, which may happen early next fiscal. The regulator is set to issue the final guidelines on new set of private banks anytime from now.

To a query on what will be his focus area--large cities or rural areas--if given allowed to set up bank, Jain said the latter (non-metros), as opportunities are much more in semi-urban and rural markets.

"My focus will not be the metros or the large cities, which are over-crowded. I am very confident that I can do an encore of my NBFC and brokerage success in commercial banking too by focusing on the non-metro markets," Jain said.

Whether the group has enough financial muscles to run a bank and also could meet the strict entry norms, Jain answered in the affirmative.

"None of my business verticals is making losses, including the broking arm, which is witnessing an erosion of margin due to market volatility and poor volume. Since we are not an over-leveraged company, we can easily raise more than enough funds."

Arguing that execution is the key for success in any field, including banking, Jain said, "If with 1-2 bps margin, down from 100-120 bps a few years ago, brokerages are making money today, better technology and innovation can help run a successful bank at half the cost which is being charged today."

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • The US can no longer take India for granted, as Kerry’s visit shows

    Despite the feel good factor in Indo-US ties, not the least surprising given BJP’s long term support for free market and laissez-faire economy, the

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Urs Schöttli

Why cleanliness is a vital human right

I have spent the past few months in India witnessing ...

Parvez Imam

Tourism agenda with a colonial undertone

Tourism is supposed to bring in foreign exchange and provide ...

Dharmendra Khandal

Let the tiger breathe in its natural home

The world has been observing July 29 as International Tiger ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture