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Home >News >India >Ex-RBI Dy Guv Gopinath to head panel on bank licences

The Reserve Bank of India has set up an advisory committee to evaluate applications for universal banks and small finance banks. The panel led by former RBI deputy governor Shyamala Gopinath will have a tenure of three years.

Other committee members include Revathy Iyer, director of RBI’s central board, former RBI executive director B Mahapatra, former Canara Bank chairman T.N. Manoharan and former managing director of State Bank of India Hemant Contractor.

The applications for universal banks and small finance banks (SFBs) will be screened by the central bank to ensure prima facie eligibility of the applicants, before the panel evaluates the applications.

In 2019, RBI released the draft guidelines for on-tap licensing for SFBs to encourage more players to enter the segment with a view to promote financial inclusion. It had said that a performance review of SFBs revealed that they had achieved priority sector targets and was successful in furthering financial inclusion.

In September 2013, after Raghuram Rajan became the governor , RBI made efforts to create a more diverse banking sector. It gave licence to two universal banks (IDFC Bank and Bandhan Bank). It had also given licence to a slew of payments banks and SFBs . Rajan had proposed differentiated licences for wholesale banking and custodian banking to make the system more diverse.

In September 2015, the central bank had granted in-principle nod to 10 applicants to set up SFBs.

In August 2016, it paved the way for on-tap universal bank licences. In November, an RBI committee had proposed to allow Indian corporate houses into banking.

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