Why few NBFCs want to become banks despite RBI's new recommendations

Topics NBFC | Banks | Indian banking sector

Last Friday, the P K Mohanty working paper from the Reserve Bank of India (RBI) suggested, among other things, that well-run non-banking financial companies (NBFCs) with assets of Rs 50,000 crore and above, and 10 years of operations could be considered for conversion into banks. Since such a transition could reduce the cost of funds by as much as 1.7 percentage points in a highly competitive business, NBFCs from Shriram Capital to Aditya Birla Capital should have been rushing to the drawing boards with conversion plans. But so far, there is little excitement from the big boys. “If.....

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