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Usha Thorat, Nachiket Mor to head RBI panels for differentiated bank licenses

72 applications for Small Finance Banks and 41 applications for Payments Banks were received; numbers could go up

BS Reporter  |  Mumbai 

Nachiket Mor

Usha Thorat, former deputy governor of the Reserve Bank of India (RBI) will chair the External Advisory Committee (EAC) to evaluate applications received for small banks, while Dr. Nachiket Mor, Director, Central Board of the Reserve Bank will chair the EAC for payment More than 100 entities have applied for small and payment banks

In its bi-monthly monetary policy review, governor Raghuram Rajan said that 72 applications for and 41 applications for were received up to the deadline for submission yesterday. This number excludes applications that might have been received at other venues.

The last date of receipt of applications was February 2, 2015. As stated in the guidelines, two External Advisory Committees (EACs) will evaluate the applications received for setting up of small finance and and thereafter make their recommendations to the Reserve Bank.

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Some of India’s top business houses such as Ltd (RIL) and are among about 100 entities that have applied for payment and small bank licences, the application deadline for which ended on Monday. Bharti Airtel was the first to announce plans for a payment bank licence, through an association with Kotak Mahindra Bank, on Thursday.

Those who applied to the Reserve Bank of India (RBI) for small bank licences included Nirmal Jain-led IIFL Holdings Ltd, UAE Exchange, Kerala-based ESAF Microfinance, Punjab-based Capital Area Local Bank and Andhra Pradesh-based Coastal local Area Bank.

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had piloted the idea of payment and small banks to extend basic banking to millions who didn’t have access to banking and financial services. Encouraging alliances for starting payment banks, Deputy Governor H R Khan had last week said partnerships were crucial for the success of differentiated banks. If these entities had cost-effective frameworks and used mobile and telecom networks, they entities could be successful, Khan added.

According to the guidelines issued by RBI in November, payment banks can accept demand deposits subject to a cap of Rs 1 lakh a customer and provide payment and remittance services through channels such as internet, branches, business correspondents and mobile banking. They, however, cannot offer credit facilities directly but can act as an agent of a commercial bank for credit and other services.

First Published: Tue, February 03 2015. 11:38 IST
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