RBI sets up committee to evaluate applications for banks

The Reserve Bank of India has set up the Standing External Advisory Committee to evaluate applications for universal banks as well as small finance banks.

Mumbai: In a significant move to speed up the processing of applications for banks, the Reserve Bank of India (RBI) has set up an expert committee.

“The Reserve Bank of India today announced the names of the members of the Standing External Advisory Committee (SEAC) for evaluating applications for Universal Banks as well as Small Finance Banks,” said the central bank in a statement on Monday.

The tenure of the SEAC will be for three years and it will be headed by Shyamala Gopinath, former Deputy Governor of RBI, said the statement.

Besides the Chairperson, Revathy Iyer, Director, Central Board, RBI; B Mahapatra, former Executive Director, RBI and presently Chairman, NPCI; T N Manoharan, former Chairman, Canara Bank; and Hemant G Contractor, former MD, SBI and former Chairman, PFRDA, are members of the committee.

According to the RBI, the SEAC was set up under the guidelines for 'on tap' licensing of universal banks in the private sector in August 2016 and guidelines for 'on tap' licensing of small finance banks in the private sector in December 2019.

The guidelines indicate that the applications for universal banks and small finance banks will be initially screened by the RBI before sending those applications to the SEAC.

At the third level, the recommendations of the SEAC will be examined by the RBI’s Internal Screening Committee (ISC) that consists of the Governor and Deputy Governors.

The ISC, in turn, will submit its recommendations to the Committee of the Central Board of the Reserve Bank for the final decision to issue in-principle approval.

(Shravan Nune)