Archive · 28 Jul 2026
Shriram Finance Considers Universal Bank Licence
Shriram Finance, a big lending company in India, is thinking about getting a special licence to become a full-service bank.
This could happen if the market conditions are good and their new partner, MUFG Bank, agrees.
Becoming a bank has both good and bad sides.
It could make borrowing money cheaper, but it also comes with lots of rules and challenges.
Shriram Finance already has a strong position in vehicle financing and is growing in other areas like gold loans and small business loans.
They expect to grow a lot in the next few years.
Shriram Finance may apply for a universal bank licence if market conditions and MUFG Bank support the move.
Converting to a bank would bring regulatory and operational challenges, including compliance with CRR and SLR requirements.
MUFG Bank's investment has strengthened Shriram Finance's position in vehicle financing and reduced borrowing costs.
Shriram Finance expects assets under management to grow 18% in FY27 and its gold loan portfolio to triple in three years.
The company plans to expand its MSME business with a focus on dealer finance and supply chain financing.
- Who
- Shriram Finance, MUFG Bank
- What
- Consideration of applying for a universal bank licence
- When
- If market conditions become favourable and with MUFG Bank's support
- Where
- India
- Why
- To lower cost of funds and strengthen market position
Pros of Universal Bank Licence
Cons of Universal Bank Licence
Cost of Funds
Pros of Universal Bank Licence
Lower cost of funds due to banking licence
Cons of Universal Bank Licence
Challenges in mobilising low-cost CASA deposits
Regulatory Challenges
Pros of Universal Bank Licence
Potential benefits from regulatory compliance
Cons of Universal Bank Licence
Compliance with CRR and SLR requirements
Operational Challenges
Pros of Universal Bank Licence
Building a strong deposit franchise
Cons of Universal Bank Licence
Pressure on margins due to regulatory requirements
- Company
- Shriram Finance
- Strategic Investor
- MUFG Bank
- Stake Acquired by MUFG
- 20%
- Investment Amount
- ₹39,618 crore
- Borrowing Cost
- 7.8% (down from 8.3%)
- Expected AUM Growth
- 18% in FY27
- Gold Loan Portfolio
- Expected to triple to ₹20,000 crore in 3 years