REPCO Bank, which was recently in the news after the Junior Union Home Minister assured it of helping to get an RBI license, was in for a shock on Tuesday when RBI rejected its application.
In a press release, RBI said that it has received 11 applications to set up banks under the Guidelines for ‘on tap’ Licensing of Universal Banks and Small Finance Banks, and the names of these applicants were announced earlier.
“The examination of six applications has now been completed as per the procedures laid down under these guidelines. Based on the assessment of the applications, the following applicants were not found suitable for granting of in-principle approval to set up banks”, reads the RBI release.
The name of the Repatriates Cooperative Finance and Development Bank Limited (REPCO Bank) figures prominently in the list as its application was not found suitable, says the release.
Another UCB, Calicut City Service Co-operative Bank Limited which had applied under ‘on tap’ Licensing of Small Finance Banks, also had to suffer the fate of Repco Bank as the regulator did not find it eligible for an SFB license.
There were many other financial entities that also failed to qualify the RBI test and these include VSoft Technologies Private Limited, UAE Exchange and Financial Services Limited, Chaitanya India Fin Credit Private Limited and Shri Pankaj Vaish, and others
RBI is yet to disclose the reasons for rejecting the REPCO Bank case. It was established on 19th November 1969 with the primary objective of Rehabilitation of Repatriates from Burma and Sri Lanka. The Bank is registered as a Cooperative Society functioning under the Administrative Control of the Union Ministry of Home Affairs.
The Head Office of the Bank is situated in Chennai with branches spread across locations in the Five Southern States and Union Territory of Puducherry with 108 branches.
The Bank has a total business mix of around Rs. 16500 Crores. The Bank is consistently making profits for the past three decades and completed 52 successful years in the field of Banking and entered into 53 years.
REPCO Bank has promoted two financial institutions Viz. Repco Home Finance Ltd., (RHFL) is a housing company, and Repco Micro Finance Ltd (RMFL) provides Micro Finance to Self Help Groups.
Recently, Union Minister of State for Home Affairs Ajay Kumar Mishra launched many new schemes of the Repco Bank, in a function organized in Chennai. The Junior Minister assured setting up a committee to expedite the process of securing a license to the Repco Bank from the RBI.