RBI rejects Sachin Bansal-led Chaitanya India Fin Credit’s application for universal bank

After receiving 11 applications to set up a bank, The Reserve Bank of India (RBI) has rejected six applications, including Sachin Bansal-led Chaitanya India Fin Credit to obtain a Universal Bank license.

The development comes just after Navi Technologies announced the public issuance of its non-convertible debentures (NCDs) to raise Rs 600 crore in debt.

Along with Chaitanya India Fin Credit, the central bank has also rejected five other applications, including UAE Exchange and Financial Services Limited, The Repatriates Cooperative Finance and Development Bank Limited (REPCO Bank), Shri Pankaj Vaish and others, VSoft Technologies Private Limited, and Calicut City Service Co-operative Bank Limited.

VSoft Technologies and Calicut City Service Co-operative Bank had applied for a small finance banking license. The bank further added that the remaining five applications are under examination.

RBI had received 11 applications to set up a bank under the Guidelines for ‘on tap’ Licensing of Universal Banks and Small Finance Banks.

"We are going to evaluate the written response and chart out our next course of action. A lot of options are there in front of us and there are many things to explore like reapplying. The news is just out and we will have to wait for RBI's written responses and then respond," said Sachin Bansal during a virtual meet to announce the issue of the NCDs.

Under the RBI rules, any entity whose application for on-tap licensing has been rejected, cannot re-apply for three years, according to a 2016 PwC analysis of the rules.

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