The Reserve Bank of India (RBI) Monday set up a new standing external advisory committee (SEAC) to evaluate applications for universal banks and small finance banks (SFBs).

The five-member panel will be headed by former RBI deputy governor MK Jain as the chairperson.

According to the licensing guidelines, applications for universal banks and SFBs are initially screened by the RBI to ensure prima facie eligibility of the applicants.

Thereafter, SEAC, comprising eminent persons with experience in banking, financial sector and other relevant areas, evaluates the applications.

The other members of the panel are: Revathy Iyer (Director, Central Board, RBI); Parvathy V Sundaram (former Executive Director, RBI); Hemant G Contractor (former MD, SBI and former Chairman, PFRDA); and N S Kannan (former MD & CEO, ICICI Prudential Life Insurance Co).

The tenure of the panel will be for three years.

The secretarial support to the committee would be provided by the Department of Regulation, RBI.

The first committee, formed in March 2021, was chaired by Shyamala Gopinath, former RBI deputy governor.

Revathy Iyer and Hemant G Contractor were members of the previous SEAC also.

Guidelines for 'on tap' licensing of universal banks in the private sector were announced in August 2016 and for SFBs in December 2019.

The applications currently pending for RBI approval include Annapurna Finance and AU Small Finance Bank for universal bank licence and Fino Payments Bank and VFS Capital for SFB licence.