Reliance Capital partners Japan's Sumitomo Mitsui Bank, Nippon Life for banking sector foray

BT Online Bureau    New Delhi   Last Updated: June 26, 2013  | 14:19 IST

Anil Dhirubhai Ambani Group firm Reliance Capital has announced that Japan's Sumitomo Mitsui Bank and Nippon Life would become its strategic partners in the proposed banking venture.

Sumitomo Mitsui Trust Bank is one of the largest banks in Japan, while Nippon Life Insurance is among Asia's largest financial services company and already has strategic stakes in Reliance Capital's life insurance and mutual fund units.

Reliance Capital, which is present in a host of non-banking financial services businesses, would be the main promoter of the proposed bank, the application for which would be soon submitted to the Reserve Bank of India.

The company in a statement said both Sumitomo and Nippon would have 4-5 per cent stake each in the proposed bank, subject to regulatory approvals, while agreements to this effect have been signed with them.

"Sumitomo Mitsui Trust Bank is amongst the largest banks in Japan and the largest institutional investor in the country," Reliance Capital CEO Sam Ghosh said, while adding that it would bring in vast experience in retail and institutional banking to the new venture.

Sumitomo has total assets of $400 billion, advances of $238 billion and net assets of $25 billion.

Nippon Life, also known as Nissay, is Japan's largest private life insurer with revenues of $71 billion, profits of $2 billion and it is also present in a host of other Asian countries and in North America and Europe.

With the latest move, Reliance Capital joins a host of other entities having firmed up their plans to seek a banking licence, for which applications need to be submitted by July 1 with the central bank.

Religare Enterprises has already announced plans to dilute promoter stake to 49 per cent to meet the eligibility criteria, while Aditya Birla group, JM Financial Srei, TFCI and a host of others have also lined up their plans.

There are reports that Tatas are also among the interested candidates, while Mahindras have dropped their plans to seek a bank licence.

Reliance Capital, the financial services arm of Anil Ambani-led business conglomerate Reliance Group, is present in insurance, mutual funds, brokerage, investment banking and a host of other financial services sectors.

Shares of the company zoomed over 6 per cent to Rs 332 in early trade at the Bombay Stock Exchange.

With inputs from PTI