Applicants Line Up For RBI’s On-Tap Banking Licences

The Reserve Bank of India said on April 15 it has received four applications each for on-tap universal private bank licences and small finance bank licences. This is part of the RBI’s guidelines for such licences released in August 2016 and December 2019 respectively.

The four entities which have submitted on-tap universal bank licences include:

• UAE Exchange and Financial Services.
• REPCO Bank.
• Chaitanya India Fin Credit.
• Pankaj Vaish and others.

Those which are seeking on-tap small finance bank licences are:

• VSoft Technologies.
• Calicut City Service Cooperative Bank.
• Akhil Kumar Gupta.
• Dvara Kshetriya Gramin Financial Services.

According to the guidelines released by the central bank in August 2016, eligible entities seeking universal bank licences must be individuals/entities with at least 10 years of experience in banking and finance at a senior level or private companies or groups with at least 10 years of successful track record. Groups or companies applying for such licences must have assets of Rs 5,000 crore or above and the non-financial businesses don’t account for 40% or more of these assets.

In April 2014, the RBI had given in-principle approval to Bandhan Bank Ltd. and IDFC Bank to start universal banking operations. IDFC Bank has since merged with Capital First Ltd. to form IDFC First Bank.

Similarly, to be eligible to apply for a small finance bank licence, individuals must have at least 10 years of experience in the banking and finance sector at senior levels. Groups, companies, existing payments banks, non-banking finance companies, microfinance companies, local area banks and cooperative banks applying for these licenses must have at least five years of successful track record.

Last month, the regulator set up a five-member standing external advisory committee under former RBI Deputy Governor Shyamala Gopinath to review such applications, after the RBI had initially screened them for eligibility.

Universal Bank License Aspirants

UAE Exchange

UAE Exchange and Financial Services, which has now changed its name to Unimoni Financial Services, had previously applied for a universal banking license in India in June 2017 after the RBI opened up the application process for on tap licensing, the regulator had said on its website. The company provides loans, payments and wealth management services, according to details available on its website.

REPCO Bank

REPCO Bank is a multi-state cooperative bank set up by the government in 1969. It was set up for the purpose of promoting rehabilitation activities for repatriates from neighbouring countries, mainly from Sri Lanka and Burma (now Myanmar). The bank is operational in Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, Kerala and the Union Territory of Puducherry.

Chaitanya India Fin Credit

Flipkart co-founder Sachin Bansal-led Chaitanya India Fin Credit is a microlender operating in seven states, covering over 5 lakh customers. It provides loans in segments like housing, income generation, agriculture, animal husbandry, trade and small businesses, among others. As of March 2020, the company’s assets under management stood at Rs 881 crore, up 54% year-on-year, according to its last available annual report. The company was taken over by Bansal’s Navi Finserv in September 2019, and had applied for a universal bank license in January 2020.

Pankaj Vaish and Others

Vaish is a former Citi banker, who had led the markets vertical in India, Mexico and the U.K. Previously, he served as managing director and head of equities at Nomura Securities. He is currently chief investment officer at New York-based PV Capital Management LLC.

Small Finance Bank License Aspirants

VSoft Technologies

VSoft Technologies provides banking and payment solutions to financial institutions. While it was founded in the U.S. in 1996, it has businesses across seven countries, including India. According to data available on its website, the company provides banking and payment solutions to over 1,000 clients across geographies. Some of its services include Wings, a core banking solution; Roots, geared to provide financial inclusion related services; Onview, a payments solution which helps customers access banking on the go across devices; and Vantage, a data management service for financial institutions.

Calicut City Service Cooperative Bank

Set up in 2002, the cooperative lender provides banking services to customers in the city of Calicut (now Kozhikode) in Kerala. As of March 31, 2019, the cooperative bank had 1.48 lakh members. It has 24 branches across the city and also operates a medical store and dialysis centre in Kozhikode.

Dvara Kshetriya Gramin Financial Services

Incorporated in 2008 by Dvara Trust, the financial services company provides financial services across unbanked areas in the country. The company operates in Tamil Nadu, Odisha, Uttarakhand, Karnataka, Jharkhand and Chhattisgarh serving individual customers and enterprises in remote rural areas. Its products include basic microfinance loans, savings products linked with banks, personal loans, business development loans, insurance products and mutual funds for financial excluded customers.

It’s not clear which Akhil Kumar Gupta has applied for a small finance bank licence with the RBI.