New Bank License: RBI has constituted a Standing External Advisory Committee to consider applications for licenses of Small Finance Banks along with Universal Banks.
New Bank License: Banking sector regulator Reserve Bank of India has taken a big step towards issuing new banking licenses. RBI has reconstituted the Standing External Advisory Committee to consider applications for licenses of Small Finance Banks along with Universal Banks. The five-member committee will be chaired by former Deputy Governor of Reserve Bank of India MK Jain.
As per the licensing guidelines, preliminary scrutiny of applications for licenses of Universal and Small Finance Banks is done by RBI to ensure prima facie eligibility of the applicants. After this, SEAC, composed of persons having experience in banking, financial sector, evaluates the applications.
Other members of the committee include Revathi Iyer (Director, Central Board, RBI), Parvati V Sundaram (Former Executive Director, RBI), Hemant G Contractor (Former Managing Director, SBI and Former Chairman PFRDA), and N S Kannan (Former Managing Director and CEO, ICICI Prudential Life Insurance Company). The tenure of the committee will be three years.
On the formation of the committee, RBI said, “Secretarial assistance to the Committee will be provided by the Department of Regulation, RBI. Earlier, RBI had constituted the first committee in March 2021 under the chairmanship of former Deputy Governor Shyamala Gopinath and its term was for three years.
Currently, the applications of Annapurna Finance and AU Small Finance Bank for universal bank license and Fino Payments Bank and VFS Capital for small finance bank license are pending with the regulator for consideration. The committee cannot examine the applications of small finance banks that have applied or will apply for universal bank license, as their fit and proper criteria were already examined while granting SFB license.
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