RBI rejects bank bids by Sachin Bansal, 5 others

MUMBAI: The Reserve Bank of India (RBI) has rejected the banking licence application from Flipkart co-founder Sachin Bansal’s Chaitanya India Fin Credit along with five others because they were not found to be suitable.

The other entities whose application for a banking licence the RBI rejected include the UAE Exchange, the Repatriates Cooperative Finance and Development Bank (Repco Bank) and Pankaj Vaish. Repco is a multi-state cooperative society promoted by the Centre in association with the governments of Tamil Nadu, Kerala, Karnataka and Andhra Pradesh.

Vaish is a former Citibanker who had subsequently worked with Lehman Brothers and Nomura in India. Besides these, the RBI has also rejected the application for a small finance bank licence by VSoft Technologies and Calicut City Service Cooperative Bank.

VSoft Technologies is a company that provides banking and payment solutions to financial institutions. UAE Exchange had put in an application for a bank licence when it was promoted by B R Shetty, the Dubai-based entrepreneur. Since then, the company has been rechristened Unimoni.

Earlier this month, the RBI had imposed a Rs 30-lakh fine on Unimoni for not complying with norms on prepaid instruments. Bansal had earlier received a show-cause notice from the Enforcement Directorate over an alleged violation of foreign investment norms amounting to Rs 23,000 crore last year.

He had moved the court to challenge the notice.While there are no fixed criteria for companies to qualify for a bank licence, the RBI puts applicants through a fit and proper test to ensure that the promoters are not facing any regulatory action.