Aditya Birla Nuvo to seek banking licence

Aditya Birla Nuvo on Tuesday said it will apply to ReserveBank of India (RBI) for seeking a bank licence.

The board of the company has approved the proposal of making an application tothe RBI for obtaining licence for setting up bank in accordance with theguidelines issued by the central bank for licensing of new banks in the privatesector, Aditya Birla Nuvo said in filing on the BSE.

Shares of the company closed at Rs 1,033.25 per unit, down by 1.01 per cent onthe BSE.

Earlier this month, RBI while issuing clarification on new bank licenceguidelines said the entities getting licences to open new banks will be given18 months to open branches against 12 months prescribed earlier, and promoterswould have to transfer their holdings to the non-operative financial holdingcompany (NOFHC) in a stipulated period.

The NOFHC envisages holding of the bank and other regulated financial servicesentities of the promoters under the NOFHC and prudential exposure norms for theregulated entities.

Indiahas 26 public sector banks, 22 private sector banks and 56 regional ruralbanks.

Ten banks were licenced on the basis of guidelines issued in January 1993. Theguidelines were revised in January 2001 based on the experience gained from thefunctioning of these banks, and fresh applications were invited.

Of the 10 licences issued in 1993, four banks merged with other lenders over aperiod of time. Times Bank merged with HDFC Bank, while Global Trust Bank wasamalgamated with the state-owned Oriental Bank of Commerce.

Centurion Bank took over Bank of Punjab to become Centurion Bank of Punjab, which merged with HDFC Bank in 2008.