Muthoot, Manappuram Finance rally as RBI drafts rules for small banks

MUMBAI: In a move to expand the banking industry to India’s interiors, the Reserve Bank has drafted rules for setting up small and payments banks.

The small banks will cater strictly to farmers and small businesses in rural areas while the payments banks are expected open a new field for telecom and supermarket chains.

This moved will allow corporates and NBFCs which missed out in the last round of bank licensing to take a fresh shot.

“There is a need for niche, differentiated banking in the country and we welcome the RBI decision to go ahead with setting up small banks and payment banks,” said George Alexander Muthoot, MD, Muthoot Finance.

“We also believe Muthoot Finance can play a larger role in this considering our reach in the rural hinterland with almost 60 per cent of our presence in the rural areas. Our board will meet to discuss this development in detail including the criteria laid down by the RBI,” he added.

I Unnikrishnan, ED and Deputy CEO, Manappuram Finance in an interview to ET Now told that the RBI draft norms for small & payment banks are encouraging and in line with company's vision & strategy.

“Will look at small & payment bank opportunity very keenly,” he told ET Now.

At 12:30 p.m.; Muthoot Finance was at Rs 189.85, up 5.80 per cent, on the BSE. It rallied 8.8 per cent to touch intraday high of Rs 195.40.

Manappuram Finance was at Rs 23.60, up 3.96 per cent, on the BSE. It rallied 5.72 per cent to touch intraday high of Rs 24.