Millennium Post (Kolkata)

RBI rejects 2 applicatio­ns for small finance bank


The Reserve Bank of India has rejected two more applicatio­ns, including that of Dvara Kshetriya Gramin Financial Services, for setting up small finance banks.

Earlier in July 2023, it had rejected three applicatio­ns.

RBI had received about a dozen applicatio­ns to set up banks under the guidelines for ‘on tap’ Licensing of Universal Banks and Small Finance Banks (SFBs).

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.

In a statement on Friday, the RBI said the examinatio­n of two more applicatio­ns for setting up a small finance bank has been completed as per the procedure laid down under extant guidelines.

Based on the assessment of the applicatio­ns, the central bank said it did not find applicants — Dvara Kshetriya Gramin Financial Services Private Limited and Tally

Solutions Private Limited — suitable for granting of in-principle approval to set up a small finance bank.

However, two remaining applicatio­ns are still “under examinatio­n”.

In May 2022, it announced the decisions on six applicatio­ns.

In July last year, the RBI had rejected applicatio­ns of Akhil

Kumar Gupta, Cosmea Financial Holdings Pvt Ltd and West End Housing Finance Ltd.

As per the guidelines, the initial minimum paid-up voting equity capital for a universal bank should be Rs 500 crore.

Thereafter, the bank should have a minimum net worth of Rs 500 crore at all times.

The minimum paid-up voting capital/net worth for SFBs should be Rs 200 crore.

In case of urban co-operative banks desirous of voluntaril­y transiting into SFBs, the initial requiremen­t of net worth is Rs 100 crore, which will have to be increased to Rs 200 crore within five years.

The minimum paid-up voting capital/net worth for SFBs should be Rs 200 crore

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