RELIANCE Capital As a Proposed

Bank

PRESENTED BY:ROHIT MALLADITYA PRASADTEAM LOS ANGELES

BANKING LICENCE - BACKGROUNDGoI nationalized 14 major commercial banks in 1969

In 1980, 6 more banks with deposits of Rs.2 billion or more

were nationalized

Licence issued to 10 private banks in 1993-94, 2 other banks

awarded license in 2003-04157 commercial banks [26 public

sector banks, 20 private sector banks, 43 foreign banks, 64 RRBs and 4 LABs]

as on March 31, 2013

BANKING LICENCE - BACKGROUNDFeb 2011

• (Then) Finance Minister Pranab Mukherjee announces the need for new banks

Feb 2013

• RBI issues final guidelines for licensing of new Private Sector Banks

July

2013

• RBI announces list of 26 companies that apply for banking license, starts reviewing candidates

BANKING LICENCE – WHY?

Financial Inclusion

Wider Reach of Financial Services

Mobilize Savings & Induce Growth

Inject Healthy Competition

“Average Population per Bank Branch” (APBB) for rural and semi—urban areas fell from 17,200 in 2005 to 12,100 in 2013. The APBB is likely to continue to decline as the number of branches increases. –financialservices.gov.in

Only 40 per cent of Indian adults had access to formal bank account and just 8 per cent borrowed formally in the last 12 months. -World Bank Global Findex Survey

India’s six largest cities have 11% of the total bank branches. -CRISIL

Number of savings bank accounts is close to four times the number of loan accounts. -CRISIL

BANKING LICENCE – WHY?

GROUP PROFILE

Among India’s top three private sector business houses on all major financial parameters

Assets in excess of Rs.180,000 crore and net worth to the tune of Rs.89,000 crore

Customer base of over 100 million, the largest in India

Business presence that extends to over 20,000 towns and 4.5 lakhs villages in India

COMPANY PROFILE

India's leading and amongst most valuable financial services companies in the private sector

Net worth of Rs. 12,373 crore and total assets of Rs. 41,721 crore

Highest credit quality rating assigned by ICRA, CRISIL and CARE

Experience and credibility of over two decades in the industry

BankBank That Reaches To The Masses

THE UNIQUENESS

One of the Largest Customer Base

Ability to Act as a Guarantor

Vast Experience in Indian Financial Market

Existing Infrastructure

BRANCHLESS BANKINGSignificantly lower cost of coverage

On-demand access to financial services

Initial investment is negligible as compared to ‘brick & mortar’ structure

Branchless Banking reduces cost of transaction by 75%

Wireless Access Points

Mobile Vans

Container Model for

Kiosks

SOME MEDIUMS

RELIANCE COMMUNICATIONIndia’s 2nd largest telecom operator

123 million wireless customer base representing 14.17% of the market

31 million rural subscribers covering 24% of the market

Covering 24,000 towns and 6,00,000 villages

50,000 multi-tenancy towers having capacity of 200,000 slots and 190,000 route km of optical fibre network in India

R-CLOUD

Virtual Private Network

Contains entire database of customer information and financial transaction

Enables a virtual presence and Wireless Access

Firewalled and Encrypted to protect sensitive data

VALUE ADDED SERVICES

Agri/Weather Advisory

Customized Loans

Business Correspond

ents

Online B2B Platform

REVENUE GENERATIONSavings• Mobilization of savings• Minimum fixed deposit in ballpark of

Rs.1200-1600• Lucrative Interest rate of 4-6% per annum

on savings to attract maximum deposits. • Money either circulated back into rural

market in forms of loans or invested elsewhere.

Loans• Micro and semi-micro loans offered to

customers (Rs.5000 and above)• High interest rates of 23-26% will be

charged on long term loans to cover high risk of lending to rural client

• Working Capital loans of Rs.1000 upto Rs.5000 offered with interest rate of 35-45% PA. Repayment period 1-7 days

RBI – GUIDELINES COMPLIANCE

NBFCs and entities in the

public and private

sectors are eligible to set

up a bank through an

NOFHC

Eligible Promoters

Applicants should have

sound credentials

and a 10-year track record of running their

business successfully.

“Fit & Proper”

The NOFHC should be

wholly owned by applicants.

Corporate Structure

RBI – GUIDELINES COMPLIANCE

INR 500 crores to be put up

by applicants. Bank to list itself within three years from start of operations.

Minimum Equity Cap

Not to exceed 49% for the

first five years of

commencement of business.

Foreign Shareholding

At least 50% of

directors should be

independent directors.

Corporate Governance

RBI – GUIDELINES COMPLIANCE

NOFHC and the bank will have no exposure to the promoter group. The bank cannot invest in capital instruments of

financial entities held by the

NOFHC.

Exposure Norms

Bank to open at least 25% of its

branches in unbanked rural

centres, and also comply with PSL targets and sub-

targets.

Rural Banking & PSL

While maintaining the standard banking model and offering quality services in developed and urban areas, Reliance looks to pioneer rural banking and tap into the massive 60% un-served percentage of our national population by revolutionizing the way banking is offered. Branchless and virtual banking are the biggest enabler and by pushing for adoption through incentives offered in it’s value added services, Reliance is certain of success in bringing quality financial services to the entire nation.

CLOSING THOUGHTS

THANK YOU!