RBI reveals names of applicants for universal bank, SFB licences

The universal bank licensing guidelines state that resident individuals and professionals having 10 years of experience in banking and finance at a senior level are eligible to promote universal banks

The Reserve Bank of India (RBI) on Thursday announced names of applicants under its on-tap licensing window for universal banks and small finance banks (SFBs). The list includes a foreign exchange services provider, two cooperative banks and a former banker.

Applicants under guidelines for on-tap licensing of universal banks are UAE Exchange and Financial Services, The Repatriates Cooperative Finance and Development Bank (Repco Bank), Chaitanya India Fin Credit, and Pankaj Vaish and others. Applicants seeking licences for SFBs are VSoft Technologies, Calicut City Service Co-operative Bank, Akhil Kumar Gupta, and Dvara Kshetriya Gramin Financial Services.

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 the standing external advisory committee for evaluating the applications received under the guidelines was announced on March 22, 2021.

The universal bank licensing guidelines state that resident individuals and professionals having 10 years of experience in banking and finance at a senior level are eligible to promote universal banks. Large industrial houses are excluded as eligible entities but are permitted to invest in the banks up to 10%. Non-operative financial holding company (NOFHC) has been made non-mandatory in case of promoters being individuals or standalone promoting/converting entities who/which do not have other group entities.

For SFBs, the minimum paid-up voting equity capital / net worth requirement shall be Rs 200 crore. For primary (urban) co-operative banks (UCBs) desirous of voluntarily transiting into SFBs, the initial net worth requirement shall be at Rs 100 crore, which will have to be increased to Rs 200 crore within five years from the date of commencement of business. The net worth of all SFBs currently in operation is in excess of Rs 200 crore.