The Reserve Bank of India has allowed HDFC Bank to start a non banking finance company.
The NBFC, to be set up by HDFC Bank, will be a wholly owned subsidiary and will undertake retail operations such as auto, personal loans etc. The bank does not rule out the option of roping in a partner with a minority stake.
HDFC Bank also plans to start overseas operations in Singapore, Bahrain and Hong kong soon.
Earlier, the RBI opposed setting up of NBFCs by banks because it felt that it was to take advantage of regulatory arbitrage. That time NBFCs, especially non deposit taking ones, were unregulated and did not attract prudential or capital adequacy norms.
Read more in The Business Standard article.
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