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Chennai Corporates and Pai to enter private banking

Chennai/Bangalore, Feb 27 (): Chennai corporates Murugappa Group, Shriram Group and SKS Microfinance are lining up to submit applications to RBI to start banks. The Mangalore based Pai’s who once owned Syndicate Bank are in the fray and the buzz is the Bangalore based Infosys too might join the fray.

Larsen and Toubro, Mahindra and Mahindra, Tata Finance, and Aditya Birla Group have expressed their interest in the RBI offer to start private banks. Mohandas Pai, a CA, with fine credentials has expressed his interest to apply for a banking licence. Mohandas though not related to Udipi based Pai is looking after the Manipal Education and Medical group. Pai was heading the finance and HR of Infosys.

Ramanathan, former MD and Europe head of Citibank, located in London is running an urban micro finance company Janalakshmi from 1998. The company has around Rs 200 crores of risk investments and in coming months it will increase to Rs 500 crore, so as to apply for a bank licence, a benchmark set by RBI.

The entry of finance professionals is bound to make the banking sector interesting since it will also usher in new technology.

Manipal group MD Ranjan Pai has made public their intention to enter the banking sector. Grandson of Syndicate Bank founder TM Pai Ranjan says that most parts of the country does not have banking facilities. TM Pai founded the Syndicate Bank and later it was nationalized. Today the Pai family is in to education sector with a deemed university, hospital and medical college with campus abroad. Now the Pai family is keen to enter the sector which they were forced to quit.

RBI criteria has been widely welcomed by corporates as most of the controls are with the apex bank leaving little room to manipulate. The condition that 25% of the branches should be in towns with population less than 10,000 will to a great extent curb the fly by night operators of chit firms and money lenders.