Videocon Industries to apply for banking license

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March 3, 2013: With the banking sector all gearing to open up and RBI issuing fresh guidelines for new banking licenses, many companies are planning to jump into the fray. Latest being Videocon Industries. Videocon which has already a presence in the
financial sector through a joint venture with Liberty Mutual Insurance has announced their plans to foray into banking sector with a foreign partner. In a statement made by Vengugopal Dhoot, Chairman, Videocon Industries to PTI, he said, “Already, we have entered the financial sector through our joint venture with Liberty Mutual Insurance. Now that the guidelines for new banking licence have come, Videocon will definitely apply for it”.

Videocon which has the experience and expertise to work with foreign partners in the consumer durables market is trying to make use of the same experience in the banking sector and has earmarked Rs.1,000 crore for the same which is over the requirement set by RBI of Rs.500 crores. The company would be trying to target rural and semi-urban areas with its banks and would try to leverage its brand and presence in over 500 cities across India as they enter the banking sector. Videocon is presently talking to an American bank and they would be applying for a banking license with Videocon as the majority partner.

The last date to submit applications for new banking license is July 1, 2013 and according to the new RBI guidelines, the promoter bank after getting license should start operations within one and list the bank within three years of commencement. The new banks also have to open atleast 25 per cent of their branches in unbanked rural areas.

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