Larsen & Toubro is weighing the option of applying for a full-fledged banking licence with the Reserve Bank of India proposing to allow corporates and large industrial groups to float banks.
SN Subrahmanyan, CEO and Managing Director, L&T, told Business Line that an internal committee has been set up to study the opportunity and submit a report. “We have had ambitions to take a banking licence for a long time. But we could not get it previously. There are good reasons to be in the NBFC space and there are pros and cons to becoming a full-fledged bank. We are studying it,” Subrahmanyan said.
L&T is currently present in the financial services business through its NBFC arm L&T Finance. It had applied for a banking licence in 2014 but was not selected by the RBI.
Since then L&T Finance, which started as pure-play infra finance player, has moved into retail. Over the last two years, retail has become 50 per cent of L&T Finance’s portfolio.