India's Reliance Capital mulls bank move

“Banking is the new growth opportunity. We will evaluate opportunities to enter this high growth sector,” Anil Ambani told shareholders at the company's annual general meeting in India's financial hub Mumbai.

Reliance Capital, a unit of the Reliance Anil Dhirubhai Ambani Group, would have to first apply to the Reserve Bank of India (RBI) for a license and if successful, could call the venture Reliance Bank, Ambani added.

The RBI wants greater competition in the sector and to widen the availability of banking services, particularly to swathes of rural India that have little or no access to formal loans and saving facilities.

Reliance Capital is India's largest non-banking financial institution, with a net worth of US$1.61 billion and 20 million customers.

Its businesses include mutual and pension funds, insurance, corporate finance, broking and portfolio management.

Media reports have said that Reliance Capital is considering a stake sale in its asset management business to Japan's Nippon Life, which last year paid US$680 million for a 26-percent stake in Ambani's Reliance Life Insurance.

Reliance Capital shares jumped nearly 6 percent to a day's high of 411.4 rupees at the Bombay Stock Exchange after Ambani spoke, settling to 394.5 at the close, still up 1.32 percent.

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