Money & Banking

RBI rejects 6 out of 11 applications to set up Banks

Our Bureau | | Updated on: May 17, 2022

Tthe central bank is applying stringent filters in terms of eligibility of applicants

Six out of 11 applicants, including UAE Exchange and Financial Services, The Repatriates Cooperative Finance and Development (REPCO) Bank and Sachin Bansal-backed Chaitanya India Fin Credit Pvt Ltd could not make the cut for a Bank license, according to the Reserve Bank of India.

The Reserve Bank of India (RBI) has rejected all four applications it has received for setting up universal banks. Further, it has rejected two out of seven applications it received for setting up small finance banks (SFBs). This shows that though the universal and small finance bank licenses are “on-tap”, the central bank is applying stringent filters in terms of eligibility of applicants.

RBI, in a statement, said it has found the four applicants — UAE Exchange and Financial Services, The Repatriates Cooperative Finance and Development (REPCO) Bank, Chaitanya India Fin Credit Pvt Ltd, and Pankaj Vaish and others — unsuitable under Guidelines for ‘on tap’ Licensing of Universal Banks.

The central bank also did not find two applicants — VSoft Technologies and Calicut City Service Co-operative Bank — suitable under Guidelines for ‘on tap’ Licensing of SFBs , it added.

“The examination of six applications has now been completed as per the procedure laid down under these guidelines (for ‘on tap’ Licensing of 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,” RBI said. The applications of Akhil Kumar Gupta, Dvara Kshetriya Gramin Financial Services, Cosmea Financial Holdings, Tally Solutions and West End Housing Finance for setting up an SFB are pending with the RBI. 

It was way back in 2014 that RBI last gave permission to IDFC Bank and Bandhan Bank, both from the financial services sector, to set up universal banks.

The last time that RBI gave approval to an entity to set up an SFB was to Centrum Financial Services (now functioning as Unity SFB), specifically to rescue the scam-hit Punjab and Maharashtra Co-operative Bank.

Published on May 17, 2022
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