The Reserve Bank of India has rejected the applications of six entities aspiring to get licences for on-tap universal banks and Small Finance Banks (SFBs). These include applications of the Sachin Bansal-promoted Chaitanya India Fin Credit and UAE Exchange and Financial Services, both for setting up universal banks.
The applications of The Repatriates Cooperative Finance and Development Bank (REPCO Bank) and Pankaj Vaish for universal banks, and applications by VSoft Technologies and Calicut City Service Co-operative Bank for SFBs, have all been turned down.
Navi Technologies, which owns and operates Chaitanya India Fin Credit, said on Tuesday it would engage with the RBI to understand the reasons for rejection. Sachin Bansal, promoter of Navi Technologies, said at a press conference that the company would also consider whether it needs to appeal the decision.
RBI said on Tuesday it has received 11 applications for on-tap licence for universal banks and SFBs. “The examination of six applications has now been completed as per the procedure laid down under these guidelines. The remaining applications are under examination,” the central bank said in a statement.
The guidelines for ‘on-tap’ licensing of Universal Banks and SFBs in the private sector, were issued on August 1, 2016, and December 5, 2019, respectively.
As per the guidelines, the applications are referred to a Standing External Advisory Committee (SEAC) set up by the RBI.
The SEAC submits its recommendations to the Reserve Bank for consideration. The Internal Screening Committee (ISC), which consists of the Governor and the Deputy Governors, examines applications and then submits its recommendations to the Committee of the Central Board of the Reserve Bank for the final decision to issue in-principle approval.
Entities can file an appeal against the decision of the Committee of the Central Board in one month from the order, as per the guidelines.