Reserve Bank of India (RBI) has rejected applications for on-tap licences of six firms, including that of Flipkart founder Sachin Bansal. 

Of these four had applied for a Universal Bank Licence and two for small finance bank. 

The big surprise on the list of rejections was the application of Bansal’s Chaitanya India Fin Credit Private Limited which had applied for universal bank licence. It is not clear why it was rejected but last year the Enforcement directorate had  served a show-cause notice to Bansal for alleged violation of foreign direct investment (FDI) policy.

“The examination of six applications has now been completed as per the procedure laid down under these guidelines,” RBI said, adding that based on the assessment of the applications, six of them were not found suitable for granting of in-principle approval to set up banks.

The remaining five applications are under examination.

The applicants whose licences were rejected are UAE Exchange and Financial Services Limited, The Repatriates Cooperative Finance and Development Bank Limited, (REPCO Bank), and Pankaj Vaish among others.

The RBI further said the applicants not found suitable under guidelines for ‘on tap' Licencing of Small Finance Banks are: VSoft Technologies Private Limited and Calicut City Service Co-operative Bank Limited.

"We are going to understand what happened,” Bansal said on the sidelines of  a fundraising event of the company.

“RBI will also get back on what the reason for this step was, and then we may appeal against the decision. We are going to consider whether we want to appeal", added Bansal, chairman & CEO of Navi Financial Services. “It is not the end of the road and they may look at reapplying.” 

Eleven entities had applied for on-tap bank licences since the guidelines were released by RBI.