RBI Update: In order to evaluate applications for small finance bank and universal bank licenses, the RBI established a permanent external advisory council.
New Bank License: Regulator of the Banking Sector In the process of obtaining new banking licenses, the Reserve Bank of India has made significant progress. The Standing External Advisory Committee was reorganized by the RBI to review Small Finance Bank and Universal Bank license applications. M.K. Jain, a former deputy governor of the Reserve Bank of India, will chair the five-member group.
According to the licensing standards, the RBI reviews applications for Universal and Small Finance Bank licenses in order to verify the applicant’s eligibility on the surface. The applications are then assessed by SEAC, which is made up of individuals with backgrounds in banking and the financial industry.
N S Kannan (former managing director and CEO, ICICI Prudential Life Insurance Company), Hemant G Contractor (former managing director, SBI and former chairman of PFRDA), Parvati V Sundaram (former executive director, RBI), and Revathi Iyer (director, Central Board, RBI) are among the other committee members. This committee will be in place for three years.
“The Department of Regulation, RBI, will provide secretarial assistance to the committee,” the RBI stated upon the committee’s creation. In March 2021, the RBI established its first committee, which was chaired by former Deputy Governor Shyamala Gopinath and had a three-year term.
Applications for universal bank licenses from Annapurna Finance and AU Small Finance Bank, as well as small finance bank licenses from Fino Payments Bank and VFS Capital, are now pending review by the regulator. Since their fit and appropriate requirements were already evaluated while awarding SFB licenses, the committee is unable to review the applications of small finance banks that have applied for or plan to apply for universal bank licenses.
