Mahindra and Mahindra is the latest name added to the list of corporate houses seeking a banking license after the announcement by the Finance Minister in Union Budget 2010-11 that fresh banking licenses should be issued to private players and NBFCs.

According to a top executive of the $6.3-billion group, the group is planning to seek a banking license for its non-banking finance company Mahindra & Mahindra Financial Services (MMFSL).

"We are interested in getting a banking license because we believe that Mahindra Finance has a formidable footprint in rural and semi urban areas and we are, therefore, an ideal candidate for a banking license. We are awaiting the RBI guidelines and will approach formally for various approvals when that comes through," said Uday Phadke, Mahindra's president for finance, legal and financial services.

Mahindra Finance has 450 branches in rural and semi urban areas of the country with over 5000 employees.

The company was listed in 2006 and has plans to add another 30-40 branches and around 1,500 employees in the next financial year. Over 50% of its business caters to products by M&M including commercial vehicles, tractors and utility vehicles.

"MMFSL has a net worth of around Rs 1,500 crore and its capital adequacy is very prudential so it's an ideal candidate for a banking license," said Mr. Phadke.

Many top players like Bajaj, Aditya Birla Financial Services, Reliance Capital, Religare Enterprises and Indiabulls are eyeing the banking license. Also some groups which already have NBFCs are looking for fresh license.