The Reserve Bank of India (RBI) has granted Germany’s Deutsche Bank permission to set up a non-banking finance company (NBFC) to undertake consumer finance business. Deutsche Bank is the first foreign bank to get an NBFC license after a long period.
In the recent times, HDFC Bank got the license and will also be doing small loans business through it.
On the other hand, HSBC, which also wants to enter the consumer finance market through an NBFC is still waiting for the banking regulator approval. HSBC has launched consumer finance business, under HSBC Pragati Finance, through its branch network.
According to sources, Deutsche’s NBFC will initially have 15 branches.
Several foreign banks have acquired or taken significant stakes in existing NBFCs for getting into consumer finance. Barclays Bank has acquired Rank Investments and DBS Bank has bought a stake in Cholamandalam DBS Finance.