Tata Group rethinks & plans to withdraw from banking business

26 May 2022 CW Team

The Tata Group has rethought its banking business plans and might potentially abandon them.

After a working committee of the Reserve Bank of India (RBI) advised issuing banking licences to industrial firms in November 2020, the group contemplated moving into banking through Tata Capital, its financial services subsidiary.

They claim that even while the laws for non-banking financial firms (NBFCs) and banks are convergent, there is still a benefit to being an independent finance company since banks' operational costs are substantially greater.

The largest difficulty for Tatas will be ensuring compliance at the corporate level, as almost a thousand balance sheets would need to be examined for related-party activities. Tata Neu, the group's consumer app, has a licence to operate a payment gateway.

Tata Capital is the holding firm for Tata Capital Financial Services, Tata Capital Housing Finance, and Tata Cleantech Capital, as well as three investing and consulting businesses: Tata Securities, Tata Capital Singapore, and private equity funds. With a revenue of more than 10,000 crore, Tata Capital has been limiting its exposure to corporate loans and focused on retail loans to keep credit costs low and accelerate digitalization.

The RBI has also suggested that NBFCs owned by industrial firms with assets of above 50,000 crore be transformed into banks. Banks, unlike other financial institutions, must maintain a cash reserve ratio, invest more in government bonds, lend to priority sectors such as farmers, students, and exporters, and hire competent bank employees.

The RBI's internal report, which recommended that industrial houses be granted banking licences, also recommended changes to the Banking Regulations Act, such as placing restrictions on related-party transactions and strengthening conglomerate supervisory mechanisms, including consolidated supervision, for large conglomerates.

Image Source

The Tata Group has rethought its banking business plans and might potentially abandon them. After a working committee of the Reserve Bank of India (RBI) advised issuing banking licences to industrial firms in November 2020, the group contemplated moving into banking through Tata Capital, its financial services subsidiary. They claim that even while the laws for non-banking financial firms (NBFCs) and banks are convergent, there is still a benefit to being an independent finance company since banks' operational costs are substantially greater. The largest difficulty for Tatas will be ensuring compliance at the corporate level, as almost a thousand balance sheets would need to be examined for related-party activities. Tata Neu, the group's consumer app, has a licence to operate a payment gateway. Tata Capital is the holding firm for Tata Capital Financial Services, Tata Capital Housing Finance, and Tata Cleantech Capital, as well as three investing and consulting businesses: Tata Securities, Tata Capital Singapore, and private equity funds. With a revenue of more than 10,000 crore, Tata Capital has been limiting its exposure to corporate loans and focused on retail loans to keep credit costs low and accelerate digitalization. The RBI has also suggested that NBFCs owned by industrial firms with assets of above 50,000 crore be transformed into banks. Banks, unlike other financial institutions, must maintain a cash reserve ratio, invest more in government bonds, lend to priority sectors such as farmers, students, and exporters, and hire competent bank employees. The RBI's internal report, which recommended that industrial houses be granted banking licences, also recommended changes to the Banking Regulations Act, such as placing restrictions on related-party transactions and strengthening conglomerate supervisory mechanisms, including consolidated supervision, for large conglomerates. Image Source

Infrastructure Urban

05 May 2026

Meghalaya And Assam Hold Talks To End Transport Stoppages In Garo Hills

Meghalaya and Assam have opened talks aimed at ending recent stoppages of commodity transport in the Garo Hills, officials said. The deputy chief minister, in charge of home affairs, reported that both state governments are coordinating to resolve disruptions and to restore normal movement of goods. He acknowledged that misunderstandings may have contributed to the incidents and that clarification between administrative units is under way. The discussions are intended to produce practical arrangements that will allow consignments to move without hindrance while respecting local procedures. The..

Infrastructure Transport

05 May 2026

Kochi Metro Records 1.375 mn Rise In Passengers In FY26

Kochi Metro recorded a marginal rise in ridership in the financial year 2025-26, carrying 1.375 mn more passengers than in the previous year. The service carried 36.8 million (mn) passengers in 2025-26 compared with 35.5 mn in 2024-25, representing a year-on-year increase of 3.9 per cent. The growth was described as distributed rather than concentrated in isolated spikes. A month-wise analysis shows steady gains across quarters. In the first quarter, ridership increased from 8.57 mn to 8.84 mn, while the second quarter rose from 9.13 mn to 9.51 mn. These trends indicated broad-based improvemen..

Infrastructure Transport

05 May 2026

Ghaziabad Plans 16km Metro Link To Delhi Via Hindon Airport

Ghaziabad authorities are pursuing a 16 km metro link to Delhi that will run via Hindon Airport, and a detailed project report is under way. The plan is intended to improve connectivity between Ghaziabad and the national capital and to provide an interchange with the airport. Officials said the project is being studied to assess alignments, station locations and cost estimates ahead of formal approvals and tendering. The announcement follows the inauguration of the Delhi?Faridabad metro extension, which will offer hassle free travel for around 0.2 mn daily commuters between the national capita..