No discription

1. INDIAN FINANCIAL SYSTEM
CORPORATES ENTERING INTO BANKING SECTOR
(strategies, issues, challenges)
TEAM 6
Kaushik sura
Kiran T.P
Madhuri Hegde
Rukmani sharma
Shreenivasa
Vidyashankar Dixit

2. Introduction
In India, public sector banks controls nearly 80% of
the market, thereby leaving comparatively much
smaller shares for its private peers.
RBI in 2013 released guidelines for corporates
and NBFC’s to avail license to enter into banking
sector.
The main reason behind RBI’s call for corporates
and NBFC’s was to increase financial inclusion.
26 banks applied, out of which 2 were approved
which followed all the guidelines provided by RBI.

3. Respondents in favor of new banks as per survey
of licensing new banks 2013

4. Guidelines of RBI
1) Eligible promoters
2) “Fit and proper” criteria
3) Corporate structure of the NOFHC
4) Minimum voting equity capital requirements
for banks and share holding by NOFHC
5) Regulatory frame work
6) Foreign share holding in bank

5. Cont’d
7) Corporate governance of NOFHC
8) Prudential norms of NOFHC
9)Exposure norms
10)Business plans for banks
11)Other conditions for the bank
12)Additional conditions for NBFC’s
promoting/converting into bank

6. Corporates/NBFC’s which applied for
banking sector
RBI received 26 applications out of which 1 withdrew and 2
were approved, the list of 26 applications were from the
following corporates and NBFC’s-
1) Aditya Birla Nuvo (Part of Aditya birla conglomerate)
2) Bajaj finance (Part of Bajaj Group)
3) Edelweiss financial services (A diversified Financial
services firm)
4) IFCI (Financial Consultancy and Advisory company)
5) India Bulls Housing Finance ltd (Part of India Bulls
Conglomerate)
6) Indian post

7. Contn’d
7) India infoline( Part of IIFL)
8) Inmacs Mgt services ltd (Mgt Consultancy)
9) Janalakshmi Financial services (Micro Finance Co)
10) JM Financials
11) LIC Housing Finance (Unit of LIC )
12) L&T (Larsen & Turbo engineering Conglomerate)
13) Magma Fin corp
14) Muthoot Finance

8. Contn’d
15)Reliance Capital (A unit of reliance group)
16) Religare Enterprises (Financial Services)
17)Shriram Capital (Part of shriram group)
18)Smart global venture
19)SREI Infrastrucure finance
20)Suryamani financing co ltd (Finance service)
21)UAE exchange India( Foreign Exchanges Firm)
22)Videocon

9. Contn’d
23)Tourism Finance Corp of India
24) Bandhan (Approved )
25) IDFC (Approved)
26)TATA (withdrew)
Video

10. It was incorporated on 23rd December 2014 as a
wholly owned subsidiary of Bandhan Financial
Holdings ltd.
Kolkata headquartered bandhan was the first
bank to be set up in eastern part of India after
independence
It started with base capital of Rs.2570 Cr and will
be soon rising Rs.3052 Cr.
Bandhan initially started with 501 branches and
50 ATM’s across India, presently it has 714
branches and 266 ATM’s.

11. IDFC started its operations from 1st October
2015.
Its headquarters is located at Mumbai.
IDFC started its operations with 23 branches.
IDFC partnered with a Chinese company
Alibaba group.
IDFC bank started its operations with a base
capital of Rs.2100 Cr

12. VIDEO

13. New bank vs Existing bank strategies
BANDHAN IDFC EXISTING
1)Primarily lends to
women who organize in
groups
They came up with
opening an account with
less than 4minutes
Started E-Commerce play
e.g. Digital wallet
2) Int on SB account 5-6% Zero balance accounts Marketing through social
networks
3) It borrows from banks
@18% int and lends @20-
25%p.a
Introduced Micro ATM’s Started exploring rural and
semi-urban areas
4) Customer centric Introduced DBT More customer centric
5) They have relatively
isolated R&D system
They were the first to
merge SB& Current
account
Leveraged on digital
technology
e.g. Mobile banking
6) Int on FD p.a @8.25% Int on FD p.a @8.25% Int on FD in ICICI @7.1%p.a
Int on FD in SBI @6.9%

14. ISSUES IN BANKING SECTOR
1) NPA’s
2) Reduced profits
3) Issue of money transmission
4) Corruption
5) Crisis in Mgt

15. CHALLENGES IN BANKING SECTOR
1) Staffing
2) Doorstep service
3) Competitors
4) Electricity in rural areas

16. CONCLUSION