On-tap licence: Sachin Bansal, five other applicants rejected by RBI

11 entities had applied for on-tap bank licences since the guidelines were released by the Reserve Bank of India

The Reserve Bank of India (RBI) on Tuesday rejected applications for on-tap bank licences of six firms —four of which applied for universal bank licence and two for small finance bank.

The applications rejected by the RBI include Flipkart founder Sachin Bansal’s Chaitanya India Fin Credit Private Limited which has applied for a universal bank license. Bansal is the managing director (MD) and chief executive officer (CEO) of Chaitanya India Fin. Last year, the Enforcement Directorate served a show-cause notice to Bansal for alleged violation of FDI policy.

"We are going to understand what happened. The RBI will also get back on what the reason for this step was, and then we may appeal against the decision. We are going to consider whether we want to appeal", said Sachin Bansal, Chairman & CEO, Navi Financial Services, on the side lines of the company announcing its plan to raise Rs 600 crore through public issuance of non-convertible debentures.  He further said that it is not the end of the road and they may look at reapplying.

11 entities had applied for on-tap bank licences since the guidelines were released by the RBI.

“The examination of six applications has now been completed as per the procedure laid down under these guidelines,” RBI said, adding that based on the assessment of the applications, six of them were not found suitable for granting of in-principle approval to set up banks.

The remaining 5 applications are under examination.

Apart from Chaitanya India Fin Credit, the applicants whose licences were rejected are UAE Exchange and Financial Services Limited, The Repatriates Cooperative Finance and Development Bank Limited, (REPCO Bank), and Pankaj Vaish and others.

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.