Indian brokerage group hopes to convert to a bank

The IIFL group is making a pitch for letting brokerages undertake banking business.

It said that its success with over 4,000 branches shows it could replicate the same in commercial banking.

"I am confident each of our over 4,000 branches spanning 900 locations can be converted into a bank," said IIFL group Chairman Nirmal Jain.

The city-based brokerage and NBFC player is keen on applying for banking licence as soon as the Reserve Bank invites applications, which may happen early next fiscal. The regulator is set to issue the final guidelines on new set of private banks anytime from now.

If allowed to set up banks, Jain said they will focus on semi-urban and rural markets.

"My focus will not be the metros or the large cities, which are over-crowded. I am very confident that I can do an encore of my NBFC and brokerage success in commercial banking too by focusing on the non-metro markets," Jain said.

Arguing that execution is the key for success in any field, including banking, Jain said, "If with 1-2 bps margin, down from 100-120 bps a few years ago, brokerages are making money today, better technology and innovation can help run a successful bank at half the cost which is being charged today."

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