RBL bank raises money from one of the NBFCs

culsivaji

Isn't it contradicting that banks that were created for the purpose of lending and NBFCs were inferior or a subset of operations of the bank, but now RBL bank is raising capital from Bajaj Finance an NBFC institution?

soothsayer

Since Bajaj cannot start a bank, this is a very smart way of becoming a bank promoter!

culsivaji

soothsayer 8-12-2019 01:37 PM
Since Bajaj cannot start a bank, this is a very smart way of becoming a bank promoter!

But then you can become a promoter only if you have a substantial amount of investment, and for a company with small investment cannot influence the decision making of RBL bank as a whole

soothsayer

It is one step at a time. they can keep doing it till they hit 5%. Then the regulator steps in. They could then seek a merger as Indiabulls did

asr335704

soothsayer 8-12-2019 09:40 PM
It is one step at a time. they can keep doing it till they hit 5%. Then the regulator steps in. They ...

Correctly said. It is first step they have taken.

parivijesh100

Thus is a dangerous step.

soothsayer

Agreed. But bank licences are difficult to come by. When a bank is small, it looks out for a partner who can bring in more capital and geographical presence. The good about this is there are synergies because both are financial sector entities into lending. The NBFC wants access to resources. a banking partner makes that easier. so both feel it is a win win situation.