8 apply for SFBs, universal banks

The Reserve Bank of India (RBI) on Thursday said that four applicants each have applied for 'on-tap' licences to start universal banks and small finance banks under the private sector. The four that have applied for universal bank licences are Abu Dhabibased remittance house UAE Exchange, government-owned multi state cooperative named Repco Bank, Flipkart co-founder Sachin Bansal-led NBFC MFI called Chaitanya India Fin Credit Pvt Ltd and ex-Citi Banker Pankaj Vaish & others.

This is not the first time that UAE Exchange is attempting a banking foray. It had applied for a universal banking licence in June 2017 as well.

Applicants for small finance banks are VSoft Technologies Private Limited—a provider of banking and payment solutions to financial institutions— Calicut City Service Cooperative Bank Limited, Akhil Kumar Gupta and Dvara Kshetriya Gramin

Financial Services Private Limited.

Set up in 2002, Calicut City Service Co-operative Bank caters to customers in the city of Kozhikode in Kerala. In March 31, 2019, the cooperative bank had 1.48 lakh members. It has 24 branches across the city. Dvara Kshetriya Gramin Financial Services, incorporated in 2008, by Dvara Trust provides financial services in rural areas. Details about Akhil Kumar Gupta were not available.

The applications will now be evaluated by the standing external advisory committee, set up by the RBI last month, under former deputy governor Shyamala Gopinath.

In the last round, the RBI gave two universal banking licences in April 2014 to

IDFC First Bank and Bandhan Bank. It gave 10 SFB licences in 2018, incluing to Janalakshmi, Ujjivan, RGVN (North East), among others.

The RBI had issued guidelines for on-tap licensing of universal banks in the private sector on August 1, 2016 and of SFBs on December 5, 2019.

By the 2016 guidelines, entities seeking universal bank licences must be individuals/entities with at least 10 years senior-level experience in banking and finance, private companies or groups with at least 10 years of good track record. Groups or companies seeking licences must have assets of Rs 5,000 crore and their non-financial businesses don't account for 40 per cent of these assets.