Tourism Finance for bank licence

Public sector Tourism Finance Corporation of India (TFCI) that finances tourism-related projects, informed the stock exchanges on Wednesday that it is submitting application for securing a bank licence after its board approved the same.

In a regulatory filing, it said, “Tourism Finance Corporation of India Ltd. (TFCI), in terms of the approval by the Board of Directors, is submitting application with Reserve Bank of India for Banking Licence.”

The company is promoted by a clutch of public sector institutions, with IFCI holding 42.5 per cent, SBI 9.19 per cent, LIC 7.7 per cent and other institutions together having a stake of 66.86 per cent as of March 31, 2013. 

The TFCI stock closed at Rs 22.25 on the BSE on Wednesday, down 1.11 per cent from its previous close.

On Tuesday, two non-banking finance companies, IDFC and Religare Enterprises had disclosed their plans to foray into banking business. Shares of the two companies rallied on Wednesday; while IDFC stock went up from Tuesday's closing price of Rs 142.95 to Rs 147.70 and finally closed at Rs 144.30 on the BSE. REL stock at Rs 318.85, up 0.95 per cent from its previous close, after touching an intra-day high of Rs 330, on the BSE. 

In May this year, JM Financial had announced its intention to apply for a banking licence and had roped former Citigroup CEO Vikram Pandit to be appointed as the proposed banking venture's non-executive chairman. 

Power Finance Corporation (PFC), public sector lender to power projects, had indicated last month to pick up equity stake in a public sector bank. The company's chairman Satnam Singh hadn then said, “PFC is exploring the possibility of acquiring a stake in one of the public sector banks. The proposal is with the power ministry and the finance ministry. They are currently examining it.”

The Reserve Bank of India has fixed July 1, 2013 as the deadline for applying for banking licence. It had last issued banking licences to Kotak Mahindra and Yes Bank in 2003-04.