The Chennai-based Shriram Group, which is keen to enter the banking
space once the RBI issues the final guidelines on the entry of new
players, believes it can leverage its 50-lakh customer base across
companies for a successful business.
?Many of our chit fund customers do not have access to banking
facilities and we feel they would require banking services like small
cash transaction services or remittances. Hence, we are keen to get
into the banking space though we?re awaiting the final guidelines,??
said Arun Duggal, chairman, Shriram Capital Trust.
India Infoline in its report on SCUF sources over 90% of its
business through the group?s large chit fund infrastructure. SCUF
benefits from low competitive intensity in its core geographic areas
(Tamil Nadu and Andhra Pradesh) and product niches (two wheelers, used
auto/CV, gold, small business and personal loans).
According to sources, ?Shriram Group is considered to be a strong
contender for the banking licence. There are over half a dozen
corporate houses keen to enter the banking space but the RBI is
expected to cap number of new bank licences at four.?? At present,
Shriram Group is present in the financial services space through its
various subsidiaries that offer commercial vehicle financing, life
insurance, consumer and small businesses financing, retail broking and
chit fund business. Shriram Capital Trust is the holding company of
Shriram Group. The beneficiaries of the Trust are the employees of
Shriram Group. ?It is a unique ownership structure with an employee
stock option and partnership,?? said Duggal.
Shriram Chits has a turn over Rs 2,500 crore, 465 branches and 5,000
employees. Shriram Chits operates in four states Tamil Nadu, Andhra
Pradesh, Karnataka and Maharashtra.
The Group is also looking to grow its consumer and small businesses
financing subsidiary, Shriram City Union Finance (SCUF), to enter the home loan
business. ?We will roll out the Shriram City Union branches in other
states like Maharashtra and Gujarat. We will be entering the housing
finance business once we receive the National Housing Bank approval,??
added Duggal.
Gippy Grewal Desi Rockstar