West End Housing applies for small finance bank license with RBI

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The Reserve Bank said on Friday that West End Housing Finance Ltd had applied for a license “on the fly” to set up a small finance bank.

In August, Cosmea Financial Holdings Pvt Ltd and Tally Solutions also applied for the license.

“Following on from the press release dated August 30, 2021, the Reserve Bank of India received an application under the guidelines for the ‘on-the-fly’ licensing of small financial banks dated December 5, 2019 from on behalf of West End Housing Finance Limited, ”the RBI said in a statement.

West End Housing Finance is headquartered in Mumbai.

In April, VSoft Technologies Pvt Ltd, Calicut City Service Cooperative Bank Ltd, Shri Akhil Kumar Gupta and Dvara Kshetriya Gramin Financial Services Pvt Ltd applied for the license.

The USFB, promoted by Centrum Financial Services with Resilient Innovation Pvt Ltd as a “co-investor”, was granted a banking license in October 2021. The USFB began operating on November 1.

There are currently a dozen small financial banks in the country.

The guidelines for the “on-the-fly” licensing of universal banks and private sector MFIs were published on August 1, 2016 and December 5, 2019, respectively.

In accordance with the guidelines, the initial minimum paid-up voting share capital for a universal bank should be Rs 500 crore.

Thereafter, the bank should have a minimum net worth of Rs 500 crore at all times.

The minimum paid-up voting capital / net worth for SFBs is expected to be Rs 200 crore. In the case of urban cooperative banks wishing to voluntarily switch to SFBs, the initial net worth requirement is Rs 100 crore, which will need to be increased to Rs 200 crore within five years.

The RBI in March this year announced the creation of a permanent external advisory committee to assess applications from universal banks and small financial banks.

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)

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