The Reserve Bank of India (RBI) on Monday set up a standing external advisory committee, which will evaluate applications for universal banks and small finance banks (SFBs). The committee has five members, with former RBI deputy governor Shyamala Gopinath as the chairperson.
Other members include Revathy Iyer, director, central board, RBI; B Mahapatra, former executive director, National Payments Corporation of India; T N Manoharan, former chairman, Canara Bank; and Hemant G Contractor, former MD, State Bank of India, and former Chairman, Pension Fund Regulatory and Development Authority.
The panel will have a tenure of three years. “The secretarial support to the committee would be provided by RBI’s Department of Regulation,” the central bank said.
According to guidelines, applications for universal banks and SFBs will first be evaluated by the RBI to ensure prima facie eligibility of the applicants, after which the newly formed committee will evaluate the applications.
In the guidelines for “on-tap” licensing of universal banks in the private sector, 2016, and for “on-tap” licensing of SFBs, 2019, the RBI had indicated that a standing external advisory committee (SEAC) would be constituted, which would be involved in the process of evaluating the application in these spaces.
It also mentioned that the SEAC will set up its own procedures to screen the applications. The panel will meet periodically, as and when required.
Furthermore, the committee can ask for more information as well as have discussions with any applicant and seek clarification on any issue. It will then submit its recommendations to the RBI for consideration.