The Reserve Bank of India has announced the composition of a new external committee under former deputy governor MK Jain for evaluating applications for universal banks and small finance banks.
Applications for universal banks and small finance banks will be initially screened by the central bank to ensure prima facie eligibility of the applicants. The standing external advisory committee evaluates the applications thereafter.
This is the second external committee for such a purpose. The first one, set up in March 2021, was headed by former deputy governor Shyama Gopinath.
The new committee would evaluate applications by AU Small Finance Bank and microfinance company VFS Capital, if these entities pass the first screening by the central bank. AU has submitted its application for universal banking while VFS seeks a small finance bank license.
Other members of the new five-member committee are RBI central bank director Revathy Iyer, former RBI executive director Parvathy V. Sundaram, former State Bank of India managing director Hemant G Contractor, former ICICI Prudential Life Insurance managing director NS Kannan.
Iyer and Contractor were also part of the previous committee.
The central bank said the new committee will remain for three years.
The licensing window for both universal banks as well as small finance banks are made on-tap in 2019. Since then, only two small finance banks — Shivalik and Unity — received banking licences from the regulator. Both received the license in 2021.
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