Reliance Capital, a part of Reliance Group, held its 27th Annual General Meeting (AGM) here today. Addressing shareholders at the Company's AGM, Anil D Ambani, Chairman, Reliance Capital stated inter alia:
"Your Company has submitted an application for a banking license in June 2013. Apart from the long term growth potential of the proposed bank as a profitable institution in itself, the immediate benefit to your company will be the reduction in our consolidated debt from approx. Rs. 20,000 crores to Rs. 5,000 crores, upon transfer of our commercial finance business to the proposed bank. This will improve our debt to equity ratio to a most conservative 0.5:1, far lower than industry standards.'
Ambani said that the company was adequately capitalised, and has no plans to make a capital call on shareholders for providing initial capital for the proposed bank. He added that the Company intends to list the proposed Bank in three years in accordance with existing guidelines.,
"We presently have no plans ta make a capital call, or ask you for money to invest in the Bank, a$ your Company is adequately capitalised. However, at the end of three years, we intend to list the proposed Bank, as per existing guidelines, and you may be assured we will fully explore all avenues to benefit our over 12 lakh shareholders at that time", said Ambani.
Reliance Capital plans to focus on five major businesses - Life Insurance, General Insurance, Health Insurance, Asset Management and Banking - for its future growth.
Ambani took the opportunity to welcome the new IRDA guidelines that allow banks to be licenced insurance brokers.
"We welcome the IRDA's new regulations encouraging Banks ta become Brokers, and not remain just as Corporate Agents. Such a transition will benefit hundreds of millions of customers, by providing them a wider choice of products from several life companies from each bank. This change will also widen distribution and reach for all players, especially newer entrants such as Reliance Life Insurance, and lead to our accelerated growth across the country" said Am bani.
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