RBI rejects applications of Sachin Bansal-backed firm, 5 others for setting up banks

The Reserve Bank has rejected applications of Flipkart co-founder Sachin Bansal-backed company Chaitanya India Fin Credit Private Limited, and five others for setting up banks as these were ''not found'' suitable, an official statement said on Tuesday.

The RBI in a statement said the examination of six applications has now been completed as per the procedure laid down under the guidelines.

''Based on the assessment of the applications, (six) applicants were not found suitable for granting of in-principle approval to set up banks,'' it said.

Applicants not found suitable under the guidelines for 'on tap' Licensing of Universal Banks are: UAE Exchange and Financial Services Limited; The Repatriates Cooperative Finance and Development Bank Limited (REPCO Bank); Chaitanya India Fin Credit Private Limited, and Pankaj Vaish and others, it said.

The co-founder of e-commerce company Flipkart Sachin Bansal had acquired a majority stake in Chaitanya in September 2019 with an investment commitment of Rs 739 crore. Bansal is Managing Director and CEO of Chaitanya. Bansal sold Flipkart to Walmart.

The RBI further said the applicants not found suitable under Guidelines for ‘on tap’ Licensing of Small Finance Banks are: VSoft Technologies Private Limited and Calicut City Service Co-operative Bank Limited.

The Reserve Bank had received 11 applications to set up bank under the Guidelines for ‘on tap’ Licensing of Universal Banks and Small Finance Banks.

The remaining applications are under examination, the central bank added.

The remaining five applications are for setting up of small finance bank. West End Housing Finance Limited, Akhil Kumar Gupta, Dvara Kshetriya Gramin Financial Services Private Limited, Cosmea Financial Holdings Private Limited, and Tally Solutions Private Limited are among the applicants.

The guidelines for 'on tap' licensing of universal banks and SFBs in the private sector were issued on August 1, 2016, and December 5, 2019, respectively.

As per the guidelines, the initial minimum paid-up voting equity capital for a universal bank should be 500 crore. Thereafter, the bank should have a minimum net worth of Rs 500 crore at all times. The minimum paid-up voting capital/net worth for SFBs should be Rs 200 crore.

In case of urban co-operative banks desirous of voluntarily transiting into SFBs, the initial requirement of net worth is Rs 100 crore, which will have to be increased to Rs 200 crore within five years.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)