March, 2005

Global consumer finance giant General Electric (GE) is set to foray into retail banking in India. Within the next twenty-four months, GE Consumer Finance is expected to finalise its plans to either set up a subsidiary or acquire a domestic bank.

The big-ticket announcement by the Fortune 500 company came a day after the RBI’s announcement on the roadmap on banking sector reforms. For wholly-owned subsidiaries, a networth of Rs 300 crore has to be maintained, as in the case of private banks. For acquiring a private bank, only those allowed by the regulator could be acquired and to the extent allowed by the RBI.

Reports indicate that GE is more inclined at this juncture on start-up operations through the subsidiary route, as against acquisition of a domestic bank. Elaborating on the Fortune 500 company’s roadmap for the country, David R Nissen, president & CEO, GE Consumer Finance said that the business will broadly run under two heads — retail banking and consumer finance.

At present the company has assets of over $1.2 bn in India and registered 42% growth in business till January this year.