Tata Sons withdrawal means there are now 24 applicants for banking license, following the earlier withdrawal of the Videocon Group.

"The Tata group comprises over 1,000 companies engaged in multiple sectors and geographies, with a significant presence outside India. On a detailed evaluation of the ‘Guidelines for Licensing of New Banks in the Private Sector' and analysis of clarifications thereto, Tata Sons has reached a conclusion that the group's current financial services operating model best supports the current needs of the Tata group's domestic and overseas strategy, and provides adequate operating flexibility to its companies, while securing the interests of the group's diverse stakeholder base.

After prolonged deliberations and detailed analysis, Tata Sons has therefore decided to withdraw its application dated July 1, 2013, from the current round of licensing," a release from Tata Sons states.

It further adds that Tata Sons remains committed to financial inclusion and believes that the group's existing financial services footprint uniquely positions it to provide technology excellence and access to India's hinterland.

"The company shall continue to monitor developments in this space with great interest and looks forward to participating in the banking sector at an appropriate time," the release says.

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