'India is starved of banking and NBFCs are needed for an economy of our size,' says Ajay Piramal

Ajay Piramal, Chairman, Piramal Group on Wednesday said India is 'starved' for banks at the grassroot level and only NBFCs could serve that need. 

Speaking to Sourav Majumdar, Editor, Business Today magazine, Piramal said India's growth depends on smaller cities and NBFCs have to be allowed to thrive there. 

"If you want to improve India,the tier 2, 3 and 4 cities have to grow, it's important for NBFCs to grow because it's impossible for banks to reach there," said Piramal at a session titled "Animal Spirits: The Investment Drought. The Growth Binge. The Skill of the Entrepreneur".

"In a growth economy like India, there will always be need for financial services. For an economy of our size, there are very, very few banks," Piramal said.

In 2021, Piramal Group completed DHFL acquisition by paying Rs 34,250 crore to creditors.

The total consideration paid by the Piramal Group of Rs 34,250 crore includes an upfront cash component of Rs 14,700 crore and issuance of debt instruments of Rs 19,550 crores (10-year NCDs at 6.75 per cent per annum on a half-yearly basis. 

Piramal had said there were 70,000 creditors of DHFL and most of them are recovering approximately 46 per cent of their pending dues through the successful completion of this process. 

On Wednesday, Piramal said while there was fraud on the wholesale said, the retail book of DHFL "had value".

"Looking at DHFl's customer profile, the average ticket size of the retail loan book will be nearly Rs 17 lakh and around 38 per cent of the total retail loans, by volume, will be Rs 10 lakh or below," Piramal said on Wednesday.