The Reserve Bank of India (RBI) has set up a “standing external advisory committee (SEAC)” on March 23, 2021. This panel will evaluate the applications for the universal banks and small finance banks (SFBs).
Standing External Advisory Committee; This committee comprises five members. The chairperson of the committee will be the former RBI deputy governor, Shyamala Gopinath. Other members of the committee include- Director of the central board of RBI, Revathy Iyer; Former executive director of the National Payments Corporation of India, B Mahapatra; Former Chairman of the Canara Bank, T N Manoharan, Former MD of the State Bank of India, Hemant G Contractor. The committee has a tenure of three years. The secretarial support to the panel will be provided by the Department of Regulation of the RBI.
The committee will meet periodically, as and when it will be required. The panel will be free to ask for more information and can hold discussions with any applicant for clarification on any issue. After this, the committee will submit its recommendations to the apex bank.
Guidelines regarding application
As per the guidelines of the RBI, the applications for universal banks and SFBs will first be evaluated by the central bank which will be ensuring the prima facie eligibility of the applicants. Following this, the standing external advisory committee will evaluate the applications. The guidelines further highlight that, for the ‘on-tap licensing of the universal banks for 2016’ across the private sector and for the ‘on-tap licensing of the Small Financial Banks, 2019’ the SEAC will be set up which will evaluate the application across these spaces. The guidelines also mention that the newly set up panel will set up its own procedures for screening the applications.