The Reserve Bank of India (RBI) has rejected the universal bank licence application filed by Annapurna Finance.
Annapurna Finance was established in 2009 and is now one of the top ten NBFC-MFIs (non-banking finance company-micro finance institution) in the country, according to its website. As on March end, the MFI had ₹11,034 crore of loans, 2.9 million clients and 1,636 branches.
RBI Governor Sanjay Malhotra, in a post monetary policy committee (MPC) meeting held today, said the regulator is reviewing the pending applications of various lenders who have applied for conversion to a bigger banking licence. He said that one such conversion application of a lender was rejected, without naming the entity.
Currently, Fino Payments Bank has applied for a small finance bank licence, while AU Small Finance Bank (SFB) was the first to file the application for conversion to a universal bank and Ujjivan SFB’s board has approved applying for a universal SFB licence.
Before the RBI announcement, Annapurna Finance told businessline that it has not yet received any “official” communication from the RBI regarding the status of its application for a universal banking license. “Therefore, we are unable to provide specific comments on this matter at this time,” said Dibyajyoti Pattanaik, Director at Annapurna Finance. When asked whether the MFI will apply for an SFB license, he said that after knowing the application of its universal bank license application, the MFI’s board will decide on the future course of action.
Work in progress
When asked whether the RBI has set up a timeline to approve conversion of payments banks to SFBs and from SFBs to universal banks, Governor Malhotra said: “I don’t think there is a timeline but it does not mean that we don’t have an internal timeline. Let me assure you that work is in progress for all those applications and very soon you will find out our decisions.”
“We have already articulated the decision that one of them (the lender application) was rejected. And the others also we will quickly (review),” he said.