Money & Banking

On-tap licences: RBI gets four applicants each to start universal banks, SFBs

Our Bureau | | Updated on: Apr 15, 2021
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The Reserve Bank of India (RBI), on Thursday, said four applicants each have applied for on-tap licences to start Universal Banks and Small Finance Banks in the private sector so far.

The applicants under the guidelines for ‘on-tap’ licensing of Universal Banks are UAE Exchange and Financial Services Ltd, The Repatriates Cooperative Finance and Development Bank Limited (REPCO Bank), Chaitanya India Fin Credit Private Ltd and Pankaj Vaish and others, the RBI said in a statement.

The applicants under guidelines for ‘on-tap’ licensing of Small Finance Banks (SFBs) are VSoft Technologies Private Ltd, Calicut City Service Co-operative Bank Ltd, Akhil Kumar Gupta, and Dvara Kshetriya Gramin Financial Services Private Ltd, it added.

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.

The constitution and composition of Standing External Advisory Committee for evaluating the applications received under the aforementioned guidelines was announced on March 22, 2021.

For a Universal Bank, the initial minimum paid-up voting equity capital/ net worth has been set at ₹500 crore. Thereafter, the bank have to maintain a minimum net worth of ₹500 crore at all times.

For a SFB, the minimum paid-up voting equity capital/ net worth is ₹200 crore. For Urban Co-operative Banks desirous of voluntarily transiting into SFBs, the initial requirement of net worth has been set at ₹100 crore, which will have to be increased to ₹200 crore within five years from the date of commencement of business.

Among the aforementioned eight applicants, UAE Exchange and Financial Services Ltd (Bengaluru), Chaitanya India Fin Credit Pvt Ltd (Bengaluru) and Vsoft Technologies Pvt Ltd (Hyderabad) had applied for a SFB licence in 2015. Chennai-based REPCO Bank’s subsidiary, Repco Micro Finance Ltd, had also applied for a SFB license.

The last time that the RBI granted universal bank licences was in June-July 2015, when Bandhan Bank and IDFC Bank were granted licence to carry out the banking business in India. These banks were given licenses under the guidelines for licensing of new Banks in the private sector, issued in February 2013.

Published on April 15, 2021

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