But would wait for the next governor to assume responsibility as it fears RBI may change its stance
Srei Infrastructure Finance is looking at applying for universal banking licence but would rather wait for the next Reserve Bank of India (RBI) governor to assume responsibility.
The NBFC sees the risk of regulator changing stance following the exit of present RBI chief Raghuram Rajan whose term ends in September. In what may be the last major reform under Rajan's tenure, the central bank has allowed individuals, banking professionals and NBFCs with a proven 10-year track record and sound credentials to apply for the universal bank licences, but has barred big industrial houses. The final guidelines for the same were released on August 1.
"We are going to see who's the next RBI governor coming as the new governor who comes in may have a different view. So, we need to wait and see. The application is also on tap so there is no need to rush," Hemant Kanoria, chairman and managing director of Srei Infrastructure Finance Limited, told dna. Srei management, which was busy for the last few days with earnings Board meeting and annual general meeting, is yet to go through the fine print of the regulation and would need time to make a final call.
"We would be fitting into (the regulations) but we need to study and evaluate and see whether it makes sense for us to venture. It has just been announced about 3-4 days back and we would now put it into our own internal review and see if this makes sense for us, what are the benefits that we can derive and how it dovetails into Srei's operations. All these would take time before we come to a decision," Kanoria said post the Board meeting.
Srei had shown keen interest when the Reserve Bank had released the draft guidelines in May.
"Now that the RBI has issued draft guidelines for on-tap license for universal banks, Srei is keenly following the developments on that front. A detailed evaluation on the pros and cons will be carried out after the final guidelines are announced before any further step is initiated," the company had mentioned in its annual report. Even as it weighs its plan to venture into the banking space, the Kolkata-based NBFC plans to divest stakes in two of its businesses by the end of this year: its investments in road sector as well as its subsidiary Sahaj e-Village.
"For roads, we would be rather be going for listing or get some long-term pension funds or even a private investor. For Sahaj, we would go for a strategic partner or a PE fund," Hemant said. Srei has invested in 14 roads, a diverse mix of annuity and toll-based projects and claims faster implementation advancing BOT (build-operate-transfer) revenues and accelerating payback.
Hemant had earlier told dna that Srei has been looking at monetising its eight-years-old Sahaj e-Village that runs thousands of rural common service centres. Srei has been trying to turn around Sahaj e-Village, which was set up to tap the government's initiative to set up village level IT enabled service centres for people to access e-governance services. However, with e-governance not picking up as expected, Sahaj suffered losses and the company, and is reworking its business model, and wants an investor to partner in this project.
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