Nirmal Jain of Indiainfoline is a sensible businessman who needs to and will do business in India. If you seriously look at his business model, it is the funding operations which is really making money. In the financial services industry, broking, mutual funds, life insurance – NOTHING is profitable. One HFC told me – we have so much business that we do not even care about REVERSE MORTGAGE. 

So Indiainfoline which has a nbfc – and fantastic retail network – should logically be hoping to get a banking license. I had also done a post a few months back saying we need banks for the industries, for the rural poor, urban poor, senior citizens…..asking one bank to do everything is not going to happen. Nano and JLR cannot be sold from the same showroom…you need a diff mindset, people,……all that is fine…BUT…

I cannot understand why Nirmal Jain is taking panga with the RBI…surprise, surprise…read on..


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  1. It will be interesting to see what private banks have done for financial inclusion.

    I think time has come to give licenses to the organizations who will NOT put a branch in tier 1 city. That is the only way to push the banks to concentrate on rural area. In fact some regulation is needed to make sure that banking is available to poor indians.

    All private banks are concentrating on NIM available from Tier 1 city. In fact that is the reason many are chasing banking license. It is possible that because of competition they will start looking at tier 2 and tier 3 cities.
    The reality is once tap of free licenses is opened it is difficult to close.

  2. Sanjay

    NO service can be ‘force’ delivered. Imagine the govt giving incentives to P&G for female hygiene in rural India or to HUL and Colgate so that people brush their teeth. This cannot happen.

    Similarly some pvt guy HAS TO SEE money in rural banking – then he will go. Urban India’s middle class is also not getting good service. A pvt bank like icici bank charges 750 for a bounced cheque and a Canara bank charges 55. Instead of cribbing, change the bank. As of now banking is extremely profitable – hence the Nirmal Jain crib on license. We need a Big Bazaar of banks too…

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