Addressing the shareholders at the company's annual general meeting here, Reliance Capital's chairman Anil D. Ambani said: "Apart from the long term growth potential of the proposed bank as a profitable institution in itself, the immediate benefit to your company will be the reduction in our consolidated debt from approximately Rs.20,000 crore to Rs.5,000 crore, upon transfer of our Commercial Finance business to the proposed bank. This will improve our debt/equity ratio to a most conservative 0.5:1, far lower than industry standards."
He said Reliance Capital had submitted its application for a banking licence in June 2013.
According to him, Reliance Capital is adequately capitalised, and it has no plans to make a capital call on shareholders for providing initial capital for the proposed bank. He added that the Company intends to list the proposed Bank in three years in accordance with existing guidelines.
"However, at the end of three years, we intend to list the proposed Bank, as per existing guidelines, and you may be assured we will fully explore all avenues to benefit our over 12 lakh shareholders at that time," said Ambani.
Reliance Capital plans to focus on five major businesses - Life Insurance, General Insurance, Health Insurance, Asset Management and Banking - for its future growth.
Welcoming the recent Insurance Regulatory and Development Authority's (IRDA) regulations allowing banks to act as insurance brokers and not just corporate agents, Ambani said: "Such a transition will benefit hundreds of millions of customers, by providing them a wider choice of products from several life companies from each bank."
He added: "This change will also widen distribution and reach for all players, especially newer entrants such as Reliance Life Insurance, and lead to our accelerated growth across the country."
--IANS (Posted on 27-08-2013)