Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Tata Sons Withdraws Application for Banking License in India

Nov. 28 (Bloomberg) -- Tata Sons Ltd., which runs more than 1,000 companies that make cars to chemicals and salt, withdrew an application for a banking license in India, saying its current financial-services business best suits its needs.

The Reserve Bank of India accepted the withdrawal, according to a statement from the central bank yesterday. Some of Tata Sons’ overseas companies provide financing to their customers and would have to be brought under one holding company to comply with the central bank’s guidelines, said Sarika Kapoor Chokshi, a spokeswoman for the group, which earns about 64 percent of its revenue outside India.

“Overseas financing is further complicated as the laws in some countries require the operating company to partner with a local bank to set up a financing company,” Chokshi wrote in an e-mail today. “Compliance of such requirements would not be possible under the existing guidelines.”

Companies controlled by billionaires Anil Ambani and Kumar Mangalam Birla were among 26 aspirants for licenses to set up banks in India after the central bank invited new bids for the first time in more than a decade earlier this year. Nippon Life Insurance Co. and Sumitomo Mitsui Trust Holdings Inc. plan to invest in a bank being set up by Ambani’s Reliance Capital Ltd., and former Citigroup Inc. Chief Executive Office Vikram Pandit is buying a stake in JM Financial Ltd.

Credit Growth

Prime Minister Manmohan Singh’s government is issuing new banking permits to tap savings in rural areas and spur credit flow to help revive economic growth from the slowest pace in a decade. The World Bank estimates only 35 percent of the country’s 1.2 billion people have bank accounts.

Tata Sons’ “current financial-services operating model best supports the current needs of the Tata group’s domestic and overseas strategy,” the company said in a statement yesterday. The $100 billion conglomerate’s financial-services business is run by Tata Capital Ltd.

“We still don’t know the final conditions upon which the RBI is vetting these bank license applications,” Hatim Broachwala, a Mumbai-based banking analyst at Karvy Stock Broking Ltd., said by phone. The RBI is being careful to avoid any scope for mislending and is scrutinizing applications from big corporations very closely, he said.

Saman Khan, a spokeswoman for Aditya Birla Financial Services declined to comment on whether the firm is withdrawing its application, as did spokesmen for Ambani’s Reliance Capital Ltd. and L&T Finance Holdings Ltd.

Value Industries

The Tata group may consider reapplying for a banking license, said Chokshi, who declined to comment on what regulations would need to change for the company to do so.

Tata isn’t the first to pull its application. Videocon Group’s Value Industries Ltd. also has withdrawn, the Reserve Bank said on Sept. 6.

Mahindra and Mahindra Financial Services Ltd., the financing unit of India’s biggest sports utility vehicle maker, and Piramal Enterprises Ltd. were among companies that had decided against seeking permits.

“Rules and regulations for banking licenses have not made it as attractive as we had thought earlier,” billionaire Ajay Piramal told Bloomberg TV India in an interview on June 27.

To contact the reporters on this story: Rakteem Katakey in New Delhi at; Bhuma Shrivastava in Mumbai at

To contact the editor responsible for this story: Jason Rogers at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.