The 23 entities that could not bag banking licences will be eagerly awaiting the Reserve Bank of India’s next move to give licences more regularly, virtually “on tap”, and the framework for differentiated bank licences.

The applicants who did not make the cut in this round of licensing can take heart from the RBI’s statement that “some of those entities who did not qualify in this round for a full-fledged banking licence could well apply in future rounds or could apply for differentiated licences under the proposed framework.”

L&T Finance Holdings, one of the bank licence aspirants, said it pursued the banking licence to achieve its vision of becoming a comprehensive player in an accelerated manner. This vision remains unchanged and the company will explore alternative ways of achieving it.

A company spokesperson said the company has a robust business model around multiple platforms — wholesale, retail and investment management. Each of these businesses has shown decent growth and strong financial performance.

“We have built a strong leadership team in all areas to achieve our vision of being a comprehensive financial services player,” he said.

V Lakshmi Narasimhan, Chief Financial Officer, Magma Fincorp, said: “Life does not stop at it. We will continue doing what we are doing and in a better way.”

On whether Magma will apply for a specialised bank, he said the non-banking finance company will consider it only after detailed guidelines for such banks are rolled out.

LIC Housing Finance spokesperson too held the same view.

Shinjini Kumar, Leader, Banking & Capital Markets, PwC India, said “Directionally, there are enough indications that we are moving to an on-tap licensing regime.

“One of the challenges with the existing licensing regime is that regulatory opportunity determines market entry rather than business needs and preparedness of applicants. One would hope that licensing of these two banks is just the start,” she said.

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