The Reserve Bank of India has rejected the applications of six companies seeking on-tap Universal Bank and Small Finance Banks (SFB) licenses. These include Sachin Bansal-promoted Chaitanya India Fin Credit and applications from the UAE Exchange and Financial Services, both for setting up a public bank.
The applications of The Repatriates Co-operative Finance and Development Bank (REPCO Bank) and Pankaj Baish for public sector banks and the applications of VSoft Technologies and Calicut City Services Co-operative Bank for SFBs have all been rejected.
Navi Technologies, which owns and operates Chaitanya India Fin Credit, said on Tuesday that it would engage with the RBI to understand the reasons for the denial. Sachin Bansal, founder of Navi Technologies, told a news conference that the company would also consider whether to appeal the decision.
The RBI on Tuesday said it had received 11 applications for on-tap licenses from public banks and SFBs. “The examination of six applications has now been completed as per the procedure prescribed under these guidelines. The rest of the applications are under examination, ”the central bank said in a statement.
The guidelines for Universal Bank and SFB’s ‘On-Tap’ Licensing in the Private Sector were issued on August 1, 2016 and December 5, 2019, respectively.
As per the guidelines, applications are forwarded to a Permanent External Advisory Committee (SEAC) set up by the RBI.
SEAC submits its recommendation to the Reserve Bank for consideration. The Internal Screening Committee (ISC), which consists of governors and deputy governors, examines the applications and then submits its recommendations to the Reserve Bank’s Central Board Committee for a final decision on policy approval.
According to the guidelines, companies can appeal against the decision of the Central Board Committee within one month of the order.