Vikram Pandit joins race for Indian banking licences

The list of those interested in opening new banks in India is growing by the day. Apart from Indian corporates, realty firms, microfinance institutions and brokerages, many industry veterans, be it in IT or finance, are looking to fend off competition with the help of financially strong private equity funds.

Just days after media reports said, Mohandas Pai, a chartered accountant who was head of finance and human resources at Infosys and former Citibank executive Ramesh Ramanathan are vying for banking licences, a report in the Business Standard today says Vikram Pandit, who resigned as Citigroup CEO last year, is in preliminary talks with government officials and several PE funds to become a co-applicant for a banking licence in India.

More from Business

Reuters[/caption]

According to the report, Pandit may either form a team of ex-Citi colleagues for the operational impetus to the bank or could lead the banking venture for an existing corporate house. His expertise in the field is bound to usher in new wave of technical know-how.

There is a real need for a fundamental shift from large corporate houses to small and medium enterprises, which are the critical drivers of employment and economic growth. After all, none of the large PSUs and private banks have cracked the bottom-up model that microfinance institutions (MFI) have.

And in its guidelines, the RBI has provided enough scope to give out new bank licences to microfinance institutions and non-bank financial companies with a strong track record, and to financial sector professionals, but capital is the key to their success.