Ambani confident about profitability of his new bank

Claims bank will list in three years.

Industrialist Anil Ambani, chairman of Anil Dhirubhai Ambani Group, one of India’s largest private conglomerates, said his proposed bank will help lower Reliance Capital's debt to one-fourth of current levels and would be listed as a separate entity in three years. Reliance Capital is the group's financial services arm.

Ambani said that immediate benefit of the proposed bank would be a reduction in Reliance Capital's consolidated debt from US$3 billion to US$754 million.

Reliance Capital submitted an application for a banking license in June to the Reserve Bank of India. It is one of the 26 entities that have applied for banking licenses.

Ambani said that the banking foray would also help improve R-Cap's debt-equity ratio to a conservative level of 0.5-1, which is far lower than industry standards.

R-Cap has also proposed to partner with Japan's Sumitomo Mitsui Trust Bank and Nippon Life Insurance for its proposed banking venture, with 4% to 5% stake to each of the two.