Has RBI made the funnel too small for bank licences?

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Editor's note: The Reserve Bank of India last week published a list of applicants for the coveted universal banking licence. The line-up is, shall we say, somewhat less than stellar, hinting at a poor response to RBI’s “on-tap licensing” process for full-fledged banks, announced with great fanfare back in August 2016. The star of the show is Chaitanya India Fin Credit, which effectively represents a bid by Flipkart co-founder and billionaire Sachin Bansal. Bansal’s Navi, a venture aimed at building a digital-first bank and financial services business, controls Chaitanya, a 12-year-old Bengaluru-based microfinance institution. The other applicants: -        UAE Exchange and Financial Services: The Indian arm of the UAE-based forex company—part of the Finablr group run by the scandal-plagued businessman B.R. Shetty—is a licensed non-banking financial company (or NBFC). The Indian entity was renamed Unimoni in 2018, though the RBI release mentions only the old name. -        Repco Bank: A state-owned cooperative bank based in Chennai, initially set up to help citizens repatriated from Myanmar and Sri Lanka. It has housing finance and microfinance subsidiaries. -  …