UAE Exchange still hopes to open bank in India after licence snub
The remittances company UAE Exchange is still eager to set up a bank in India after missing out in the first round of licences issued.
India’s finance ministry on Thursday said that the Reserve Bank of India (RBI) would be likely to start inviting applications to form new banks in the next few months after preparing a new set of guidelines for the licences.
UAE Exchange India applied for a bank licence last year after the RBI allowed corporate houses and non-banking finance companies to do so. It was among 25 companies that applied for a licence. Only two were successful in the first round – IDFC, an infrastructure lender based in Mumbai, and Bandhan, a Kolkata-based microfinance organisation, were awarded preliminary licences in April, the first bank licences to be issued in more than a decade. The RBI has said that it plans to issue more licences.
“We are optimistic and confident about being awarded the banking licence as and when the RBI reopens the licensing process,” said BR Shetty, the chief executive of UAE Exchange. “We have been closely associated with the Indian market, which is the largest receiver of remittances in the world. We account for 10 per cent of the total annual remittances to India. We also offer a wide range of financial services in India, tailor-made for the market.
“In spite of the great strides that the country has taken, a huge percentage of the population still doesn’t have a bank account and this unbanked segment mostly belongs to the bottom of the economic pyramid.”
Indian banks have been affected by slower economic growth and high interest rates, and public sector banks in particular have been struggling with bad loans.
“We believe that our strong bonding with the Indian diaspora and its beneficiaries, technological prowess, strong relationship with leading banks in India and rich expertise in the financial space make us a strong contender for the banking licence,” said Mr Shetty. “We are very passionate about setting up a bank in India.”
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Published: May 31, 2014 04:00 AM