“These include how successful the start-up bank will be, will the regulator consider overseas experience enough for granting a domestic licence, and would the regulator still prefer to give a licence as a bank (which they could have done, anyway) or grant a licence as an NBFC/HFC”, write analysts at Nomura.
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In a first, an Indian corporate house, Indiabulls Housing Finance, is acquiring a large stake in a foreign bank.
“Sameer Gehlaut, chairman of the company, will be investing in his persona| capacity up to 10% stake in OakNorth Bank at the same valuation”, the release added.
Secondly, not many buy the management’s belief that this acquisition will make it easier for Indiabulls HF to get the Reserve Bank of India nod to become a deposit-taking non-banking financial company (NBFC).
It further said: “Investment in OakNorth Bank will benefit the company with a global platform for building its track record of a deposit franchise in a highly regulated market”. Post this deal, Indiabulls group will be the largest shareholder in the United Kingdom bank. The company has an option to increase its stake in the bank at a later stage, a company source said.
The company is the largest non-bank lender to the small and medium-sized enterprises (SMEs) segment with SME loan disbursal of over $5 billion and outstanding SME loan assets of over $2.3 billion.
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Rishi Khosla, CEO and co-founder of OakNorth Bank, says: “This is a massive vote of confidence in OakNorth, and this major investment will enable us to accelerate and expand our ambitious growth plans to take on the major banks” “computer says no’ approach to small business lending”. OakNorth Bank is a startup full-licence universal bank, which accepts online deposits and lends offline to SMEs. During its set-up phase, the bank had secured an investment from a former member of Bank of England’s monetary policy committee.
