Four entities apply for universal bank, four others for SFB licence

Entity backed by Flipkart co-founder Sachin Bansal announced its intent for universal bank in Jan 2020

Four entities — Repco Bank, Chaitanya India Fin Credit, UAE Exchange and Financial Services, and Pankaj Vaish and others — have applied for licence to start a universal bank in the country.

Those who have applied for licence for small finance banks (SFBs) are VSoft Technologies, Calicut City Service Co-operative Bank, Akhil Kumar Gupta, and Dvara Kshetriya Gramin Financial Services.

The Reserve Bank of India (RBI) on Thursday released the names of the applicants under the guidelines for “on tap” licensing of universal banks and SFBs.

Chaitanya India Fin Credit, the entity backed by Flipkart founder Sachin Bansal, had expressed its interest in a universal bank in January last year. Chaitanya India began work as a micro-finance institution in 2009 to support low-income families which had been traditionally away from formal banking.

It operates in seven states in the country, serving over half a million clients.

Repco Bank is a multi-state cooperative society. The bank was promoted by the Centre in association with the governments of Tamil Nadu, Kerala, Karnataka, and Andhra Pradesh.

It was registered on November 11, 1969, to promote the rehabilitation of repatriates from neighbouring countries, mainly Sri Lanka and Burma (now Myanmar).

These governments hold a 55.3 per cent stake in the bank and 44.7 per cent is with individuals. Its business was Rs 15,202 crore (deposits Rs 8,197 crore and advances Rs 7,005 crore as of March 2020), according to the bank website.

The entities of NRI tycoon B R Shetty, who backs UAE Exchange, have run into trouble and lenders have begun legal proceedings to recover dues.

The RBI last month formed a five-member standing external advisory committee (SEAC), headed by former deputy governor Shyamala Gopinath, to evaluate applications for universal banks and SFBs.

Pankaj Vaish, is a former Citibank executive and has worked with financial services group Lehman Brothers and Nomura in India.

VSoft Technologies provides banking and payment solutions to financial institutions of all sizes worldwide. It was founded in 1996 in Atlanta, Georgia, United States.