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    Shriram City Union: Can't be standalone NBFC if Shriram Transport becomes a bank

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    Shriram City Union: Can't be standalone NBFC if Shriram Transport becomes a bank

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    “If the regulator pushes Shriram Transport Finance Company (to opt for banking license), then I don’t think Shriram City Union Finance can be a standalone NBFC in that sense,” YS Chakravarti, MD and CEO, Shriram City Union Finance said in an interview with CNBC-TV18.

    An Internal Working Group of the Reserve Bank of India (RBI) on Friday recommended a set of seminal changes for the banking sector. They include, granting banking licences to corporates promoters being allowed to raise stake to 26 percent from the current 15 percent, and allowing large NBFCs with over Rs 50,000 crore in assets under management to become banks even if they are owned by corporate groups.
    “If the regulator pushes Shriram Transport Finance Company (to opt for banking license), then I don’t think Shriram City Union Finance can be a standalone NBFC in that sense,” YS Chakravarti, MD and CEO, Shriram City Union Finance said in an interview with CNBC-TV18.
    “If it is allowed then we will prefer to remain separate but it depends on the regulator’s viewpoint,” he added.
    He expects a 9 percent growth in assets under management (AUM) for second half of FY21. “Credit cost should be around 2.75-3 percent for FY21,” he said.
    There has been slight decline in cost of funds probably about 8-10 basis points (bps).
    “We are hoping that we will see some reduction in cost of funds in coming quarters,” he said.
    The company is seeing maximum amount of traction in two-wheeler and SME sector, he said.
    “It is a slight positive growth in gold but it is two-wheeler and SME that I am seeing the traction,” he added.
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