Context
The Reserve Bank of India, formeda committee headed by former deputy governor ShyamalaGopinath for the evaluation of the applications for universal banks as well as small finance banks (SFB).
About the committee
- The committee will be comprised of five members.
- The constitution of the committee is by the regulator’s guidelines for ‘on-tap licensing.
- The committee will evaluate the applications after RBI will check the eligibility.
What is an on-tap facility?
- An ‘on-tap facility means that the RBI will accept applications and grant licenses for banks during the whole year. The policy allows applying for a universal bank license at any time duration, provided with the abidance of a certain set of conditions.
Universal bank
- Universal bank participates in many banking activities such as retail, wholesale, investment, and other financial services such as insurance under the one body.
Small finance banks
- They are known as a type of niche banking system in India.
- These banks provide deposits and lending services.
- These banks aim for financial inclusion to sections such as marginal farmers, micro and small industries, and unorganized sectors.
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