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Wednesday, Nov 15, 2006

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Tata Ind in informal talks with RBI

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The group looking at banking infrastructure

Chennai , Nov. 14

Tata Industries Ltd, one of the two holding companies of the Tata Group, is in informal talks with the Reserve Bank of India to let the group into `banking infrastructure', the Managing Director of Tata Industries Ltd, Mr Kishor A. Chaukar, told a press conference here on Tuesday.

He observed that in developed countries, providers of infrastructure (such as ATMs) were independent of banks — banks just received their services. However, in India, the RBI does not allow that. Transactions at all ATMs, for instance, are the responsibility of the banks. The Tatas believe that there is a scope for private sector participation in this area.


Asked what type of infrastructure provision the Tatas had in mind, Mr Chaukar said that one opportunity was `money-boxes'. These boxes could be (owned by the Tatas) put up at, say, shopping malls. The shopkeepers could deposit the day's cash collection into the box. The machine would count the money, just as an ATM does, and the amount would be instantaneously credited to their accounts.

Mr Chaukar said that banks were interested in such a service. He also mentioned that the Tatas were looking to collaborate with the IIT Madras, where Prof Ashok Jhunjunwala is developing low-cost ATMs. He said that it was possible to produce the money-boxes at a price of about Rs 3 lakh a piece.

This came up when Mr Chaukar was discussing the areas that Tata Industries — the holding company, which is mandated to facilitate entry of the Tatas into new and hi-tech areas — would get into in the coming years. He mentioned `financial services' among the new areas that Tata Industries intended to get into.

The Tatas are already into all areas of financial services — NBFC, life and non-life insurance and plastic money (cards) — except banking. Asked if the idea were to get into banking if the regulations permitted, Mr Chaukar said, "that would be my recommendation to Mr Ratan Tata (the group Chairman)."

Loyalty cards

Incidentally, Tata Industries will soon launch a `loyalty card'. You use the card to buy specified goods and services, and the reward points will be instantaneously credited to the card. "You can use the card to have lunch at the Taj," Mr Chaukar said.

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