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JM Financial Ltd will apply for a bank licence if there is a right policy and right construct, according to Vishal Kampani, Group Managing Director
In reply to a specific question whether his company will consider applying for a bank licence, Kampani observed that for India to become a $5-trillion economy, it will need all sorts of banks and it will need many more banks.
“So, it is not just about JM applying for a bank licence.
“...And if the right policy and the right construct is there, definitely JM would apply for a bank licence. I mean there is no two ways about it that JM would apply for a bank licence,” said Kampani at the CII Partnership Summit.
JM Financial was among the 26 applicants that applied for new bank licences in the private sector in 2013.
However, the Reserve Bank of India gave licence to only two applicants – IDFC Ltd and Bandhan Financial Services Pvt Ltd – in 2014.
JM Financial has four lines of business – Investment Banking, Wealth Management and Securities; Mortgage Lending, which includes both wholesale mortgage lending and retail mortgage lending; Distressed credit, which includes the Asset Reconstruction business; and Asset Management, which includes the mutual fund business.
Kampani observed that India needs 10 or 15 more well capitalised banks to move the financial savings towards interesting instruments/ products, which can fund its long-term growth needs.
He underscored that over the last couple of years, many of the non-banking finance companies (NBFCs) faced a liability shock like they have never seen before, specifically after the IL&FS crisis.
“And I think becoming a bank is obviously a very important question which is raised at every board (meeting) and to the CEO of every financial services company,” he said.
Kampani emphasised it is very important to figure out what is it that an entity wants to do when it is a bank. And largely banking in India is a last-mile business.
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