Mumbai: The Reserve Bank of India (RBI) has established a new Standing External Advisory Committee (SEAC) to evaluate applications for Universal Banks and Small Finance Banks (SFBs). The committee will serve a three-year tenure and will receive administrative support from RBI’s Department of Regulation.
Committee Composition
The SEAC will be chaired by MK Jain, former Deputy Governor of RBI, and includes five members:
Revathy Iyer: Director, Central Board, RBI
Parvathy V Sundaram: Former Executive Director, RBI
Hemant G Contractor: Former MD, State Bank of India and ex-Chairman of PFRDA
NS Kannan: Former MD & CEO, ICICI Prudential Life Insurance
The committee brings together experts from banking and finance, ensuring a comprehensive evaluation process.
Role and Guidelines
Under RBI’s licensing framework, applications will first be screened to confirm basic eligibility. Once this is done, the SEAC will assess eligible applicants based on their business plans, governance frameworks, and financial capabilities. The RBI emphasized that the SEAC’s role is critical in ensuring transparency and impartiality in the licensing process, which is a cornerstone of its regulatory approach.
Background and Implications
This is the second SEAC constituted by the RBI, following a similar panel announced in March 2021. By setting up these advisory committees, the RBI aims to regulate the entry of new players into India’s banking sector more effectively. The recommendations of the SEAC will help identify entities capable of contributing to financial inclusion and innovation in the banking space. This step underscores the central bank’s commitment to fostering a sound and well-regulated financial ecosystem.
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