Monday, 23 November 2020

Mr. Umesh Revankar, MD & CEO, Shiram Transport Finance on RBI's recent IWG report

 Mr. Umesh Revankar, MD & CEO, Shiram Transport Finance on RBI’s recent IWG report

“RBI’s IWG report to review extant ownership guidelines & corporate structure has provided recommendations, and I expect more debate on these until guidelines are finalized. The regulator had opened doors for on-tap universal banking license in 2016 and for small finance bank license in 2018, so what we are seeing in terms of opening up the sector is not a first from RBI but opening up candidature for large corporate/industrial houses and well run large NBFCs for converting to a private sector bank is a progressive step indeed.


 

Shriram Transport Finance, being a large NBFC predominantly in vehicle finance space, we have built pan-India reach with strong last-mile connectivity, all while delivering a focused product portfolio backed by speed & quality to mostly the underbanked & unbanked customers. In contrast, a bank has to provide a very wide range of services, maintain SLR & CRR requirements and operates at a much higher cost structure compared to NBFCs. So a NBFC will have to weigh the pros and cons after final guidelines, and understand the impact for stakeholders (shareholders, employees, customers) before considering conversion to a bank”.

No comments:

Post a comment