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Dept of Posts, Mahindras, Videocon join race for payment bank licences

NRI businessman M A Yusuff Ali's Lulu Group and microfinance company Ujjivan Financial Services Private Ltd are also in the fray, as per the list of 113 applicants released by RBI this evening. As many as 72 applications for Small Finance Banks and 41 applications for Payments Banks were received by the RBI. The receipt of applications for licensing of small finance banks and payments banks closed on February 2.

Coastal Local Area Bank, Equitas Holding, Janalakshmi Financial Services, Repco Micro Finance are among 72 have put in applications for setting up of small finance bank.

As many as 12 individuals like ex-Fino Managing Director Manish Khera and V Balakrishnan former CFO of Infosys have applied under Small Finance Bank category. Six applications for Payments Bank were submitted by individuals like Kishore Biyani of Future Group, M G George Muthoot chairman of Muthoot Group and Dilip S Shanghvi MD of Sun Pharma.

Small Finance Banks will primarily undertake basic banking activities of acceptance of deposits and lending to unserved and under-served sections including small business units, small and marginal farmers, micro and small industries and unorganised sector entities. Payments Banks would be allowed payments and remittance services through various channels. However, such lenders, cannot issue credit cards or undertake lending activities. On Wednesday RBI Governor Raghuram Rajan had said two external committees would evaluate applications based on fit and proper criteria and other parameters stated in the guidelines.

"As stated in the guidelines, two External Advisory Committees (EACs) will evaluate the applications received for setting up of small finance and payments banks and thereafter make their recommendations to the Reserve Bank," he had said.

The EACs for small finance banks and payments banks will be chaired by former RBI Deputy Governor Usha Thorat, and Nachiket Mor, Director, Central Board of RBI, respectively. To foray into banking business through payments banks route, Mukesh Ambani-led Reliance Industries has managed a sort of coup by partnering banking behemoth SBI, the only state-run entity in the fray.
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