Archive | November 27, 2017

Shriram Group Eager To Come In Banking Field

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 were 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 groups 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 ). 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 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.