RBI appoints panel for brand spanking new common financial institution & SFB licences

RBI had final issued banking licence in 2014 to Kolkata-based Bandhan Financial institution and IDFC.

The Reserve Financial institution of India(RBI) on Monday constituted a committee headed by former deputy governor Shyamala Gopinath to judge functions for common banks in addition to small finance banks (SFB). The structure of the committee is consistent with regulator’s tips for ‘on-tap’ licensing.

The functions for common banks and SFBs shall be initially screened by the RBI to make sure prima facie eligibility of the candidates. Thereafter, the committee will consider the functions, RBI stated. A common financial institution is a financial institution that gives retail, wholesale and funding banking companies underneath one roof.

The panel termed as Standing Exterior Advisory Committee (SEAC) may have 5 members together with Shyamala Gopinath. Revathy Iyer, director, central board of RBI; B Mahapatra, former government director, RBI and present chairman of the Nationwide Funds Company of India (NPCI), shall be a part of the committee as per RBI. Equally, TN Manoharan, former chairman of Canara Financial institution and Hemant G Contractor, former managing director (MD) of State Financial institution of India (SBI) will even be a part of the committee.

RBI’s inner working group (IWG) had earlier urged to permit massive company and industrial homes to personal banks by amending the Banking Regulation Act, 1949. Nonetheless, former RBI governor Raghuram Rajan together with former RBI deputy governor Viral Acharya had severely criticised the suggestion by the IWG, calling it as “bombshell”.

RBI had final issued banking licence in 2014 to Kolkata-based Bandhan Financial institution and IDFC.

Equally, in 2015 RBI had granted in-principle licence for small finance banks to 10 entities together with Ujjivan Monetary Companies, Janalakshmi Monetary Companies and Equitas Holdings, amongst others. Later, the regulator had launched separate tips for permitting on faucet licensing of common banks and small finance banks.

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