Three applications, including West End Housing financing’s, for the establishment of small financing banks were turned down by the Reserve Bank of India.
According to a statement released on Tuesday, these applications were deemed unsuitable for obtaining in-principle permission to establish small financing institutions.
In accordance with the rules for “on tap” licensing of universal banks and small finance banks (SFBs), the RBI had received roughly a dozen applications to establish banks.
It made the judgments of six applications public in May of last year.
According to the RBI, three further applications for the establishment of small financing banks have been examined and approved in accordance with the current regulations.
According to the evaluation of the applications, Akhil Kumar Gupta, Cosmea Financial Holdings Pvt Ltd, and West End Housing Finance Ltd. were deemed “not found suitable” for the granting of in-principle authorisation to establish a small finance bank.
The remaining applications are being reviewed, according to the central bank.
The regulations for ‘on tap’ licensing of Universal Banks and SFBs in the private sector were released on August 1, 2016, and December 5, 2019, respectively.
The first minimum paid-up voting equity capital for a universal bank should be Rs 500 crore, according to the recommendations. After that, the bank must always have a minimum net value of Rs 500 crore. For SFBs, the required minimum paid-up voting capital/net worth is Rs 200 crore.
The initial net value criterion for urban co-operative banks seeking to voluntarily transition into SFBs is Rs 100 crore, which must be enhanced to Rs 200 crore within five years.
