Tata Group rethinks & plans to withdraw from banking business

26 May 2022 CW Team

The Tata Group has rethought its banking business plans and might potentially abandon them.

After a working committee of the Reserve Bank of India (RBI) advised issuing banking licences to industrial firms in November 2020, the group contemplated moving into banking through Tata Capital, its financial services subsidiary.

They claim that even while the laws for non-banking financial firms (NBFCs) and banks are convergent, there is still a benefit to being an independent finance company since banks' operational costs are substantially greater.

The largest difficulty for Tatas will be ensuring compliance at the corporate level, as almost a thousand balance sheets would need to be examined for related-party activities. Tata Neu, the group's consumer app, has a licence to operate a payment gateway.

Tata Capital is the holding firm for Tata Capital Financial Services, Tata Capital Housing Finance, and Tata Cleantech Capital, as well as three investing and consulting businesses: Tata Securities, Tata Capital Singapore, and private equity funds. With a revenue of more than 10,000 crore, Tata Capital has been limiting its exposure to corporate loans and focused on retail loans to keep credit costs low and accelerate digitalization.

The RBI has also suggested that NBFCs owned by industrial firms with assets of above 50,000 crore be transformed into banks. Banks, unlike other financial institutions, must maintain a cash reserve ratio, invest more in government bonds, lend to priority sectors such as farmers, students, and exporters, and hire competent bank employees.

The RBI's internal report, which recommended that industrial houses be granted banking licences, also recommended changes to the Banking Regulations Act, such as placing restrictions on related-party transactions and strengthening conglomerate supervisory mechanisms, including consolidated supervision, for large conglomerates.

Image Source

Redefine the future of urban mobility! Join us at the Metro Rail Conference 2025 to explore groundbreaking ideas and insights. 👉 Register today!

The Tata Group has rethought its banking business plans and might potentially abandon them. After a working committee of the Reserve Bank of India (RBI) advised issuing banking licences to industrial firms in November 2020, the group contemplated moving into banking through Tata Capital, its financial services subsidiary. They claim that even while the laws for non-banking financial firms (NBFCs) and banks are convergent, there is still a benefit to being an independent finance company since banks' operational costs are substantially greater. The largest difficulty for Tatas will be ensuring compliance at the corporate level, as almost a thousand balance sheets would need to be examined for related-party activities. Tata Neu, the group's consumer app, has a licence to operate a payment gateway. Tata Capital is the holding firm for Tata Capital Financial Services, Tata Capital Housing Finance, and Tata Cleantech Capital, as well as three investing and consulting businesses: Tata Securities, Tata Capital Singapore, and private equity funds. With a revenue of more than 10,000 crore, Tata Capital has been limiting its exposure to corporate loans and focused on retail loans to keep credit costs low and accelerate digitalization. The RBI has also suggested that NBFCs owned by industrial firms with assets of above 50,000 crore be transformed into banks. Banks, unlike other financial institutions, must maintain a cash reserve ratio, invest more in government bonds, lend to priority sectors such as farmers, students, and exporters, and hire competent bank employees. The RBI's internal report, which recommended that industrial houses be granted banking licences, also recommended changes to the Banking Regulations Act, such as placing restrictions on related-party transactions and strengthening conglomerate supervisory mechanisms, including consolidated supervision, for large conglomerates. Image Source

Infrastructure Transport

09 Jan 2025

Anji Khad Bridge, India's First Cable-Stayed Rail Bridge Ready in J&K

Indian Railways has completed the Anji Khad Bridge, India’s first cable-stayed rail bridge, located in the Reasi district of Jammu and Kashmir. A critical component of the ambitious Udhampur-Srinagar-Baramulla Rail Link (USBRL) Project, this engineering marvel connects Katra and Reasi, promising enhanced regional connectivity and economic growth.Spanning 725.5 metres, the bridge features a 193-metre-tall main pylon, soaring 331 metres above the riverbed. Its design allows it to withstand wind speeds of up to 213 km/h and safely support train operations at speeds of 100 km/h.Constructed in th..

Infrastructure Urban

09 Jan 2025

Exporters Raise Logistics Costs Concerns with Piyush Goyal

Exporters and freight agencies have voiced concerns over high terminal handling charges at ports and the underutilisation of dry ports, adding to India’s overall logistics costs. During a meeting with Commerce and Industry Minister Piyush Goyal, they highlighted that the fees charged by shipping terminals for container storage and positioning before loading exceed port charges by Rs 10,000-15,000 per consignment. The discussion focused on logistics and shipping challenges, with the government actively working to reduce costs across the supply chain, according to an official. India is targe..

Infrastructure Transport

09 Jan 2025

Government to Revamp UDAN Scheme with Focus on Airport Readiness

The Indian government is set to revamp its regional air connectivity scheme, UDAN (Ude Desh ka Aam Nagrik), by prioritising airport readiness before inviting airlines to bid for operating routes. Financial support for the development of unserved airports and airstrips across the country is expected to be a key focus in the upcoming budget, along with stricter assessments of route feasibility, according to sources. Launched in 2017 to boost air travel in the world’s fastest-growing aviation market, the UDAN scheme caps airfares and provides subsidies to airlines for operating on less frequen..

Tata Group rethinks & plans to withdraw from banking business

Redefine the future of urban mobility! Join us at the Metro Rail Conference 2025 to explore groundbreaking ideas and insights. 👉 Register today!

Anji Khad Bridge, India's First Cable-Stayed Rail Bridge Ready in J&K

Exporters Raise Logistics Costs Concerns with Piyush Goyal

Government to Revamp UDAN Scheme with Focus on Airport Readiness

Opinion Poll

Question : Which technological advancement do you believe will most transform the real estate industry in the coming years?

Live Results :

Virtual Reality and 3D Property Tours

Smart Home and Building Automation

Blockchain for Property Transactions

Big Data and Predictive Analytics for Market Insights

Augmented Reality for Property Staging and Design

Drone Technology for Aerial Photography and Site Analysis

Latest updates

Anji Khad Bridge, India's First Cable-Stayed Rail Bridge Ready in J&K

Exporters Raise Logistics Costs Concerns with Piyush Goyal

Government to Revamp UDAN Scheme with Focus on Airport Readiness

Motilal Oswal Raises Rs 17.5 Billion for Sixth Real Estate Fund

Noida Authority Recovers Rs 4.8 Billion Floodplain from Encroachers

Noida Authority Directs Suraksha to Resume Jaypee Kosmos Maintenance

Varun Dhawan Buys Two Luxury Apartments in Juhu for Rs 869.2 Million

Cable Car Project for Mumbai Metropolitan Region Gets Green Light

Follow us on

First Name *

Last Name *

Industry *

Email Address *

Mobile Number *

Password *

Confirm Password *

Subscribe to our Newsletter

Email Address *

Password *

Please enter the details

Email Address

Tata Group rethinks & plans to withdraw from banking business

Redefine the future of urban mobility! Join us at the Metro Rail Conference 2025 to explore groundbreaking ideas and insights. 👉 Register today!

Anji Khad Bridge, India's First Cable-Stayed Rail Bridge Ready in J&K

Exporters Raise Logistics Costs Concerns with Piyush Goyal

Government to Revamp UDAN Scheme with Focus on Airport Readiness

Opinion Poll

Question : Which technological advancement do you believe will most transform the real estate industry in the coming years?

Live Results :

Virtual Reality and 3D Property Tours

Smart Home and Building Automation

Blockchain for Property Transactions

Big Data and Predictive Analytics for Market Insights

Augmented Reality for Property Staging and Design

Drone Technology for Aerial Photography and Site Analysis

Latest updates

Follow us on

Modal Heading

First Name *

Last Name *

Industry *

Email Address *

Mobile Number *

Password *

Confirm Password *

Subscribe to our Newsletter

Email Address *

Password *

Please enter the details

Email Address