NBFCs open to both organic and inorganic route to set up banks

....If permitted by the RBI, the NBFCs are likely to consider banks at the holding company level and may not convert the NBFC into a bank, according to brokerages. “If they were to convert to an NBFC, they may need to contend with issues relating to concentration risk (for NBFCs doing specialised lending), the impact of statutory liquidity ratio and cash reserve ratio on their existing borrowings. Hence, from an investors’ perspective, we believe the upside (from a bank licence) may be through the SOTP (sum of the parts) route, assuming the holding company were to hold both the bank and an NBFC and is listed,”.......

Read - BS