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ph.D. (Harvard)
(f 990'91)
law
&
Justice
for
Commerce,
Minister
Cabinet
Chairman (with Cabinet rank), Commlssion on labour
Standards and lnternational Trade (f994'96)
Former Professor of Economics, lndian Institute of
Technology, Delhi & Faculty, Hanrard University
'{.*tq- sq*
June L5,20L6.
October 5, 2015.
The RBI had issued Guidelines for Licensing of Small Finance Banks
in
the private sector and set out the criteria for eligible applicants for the
license. But these Guidelines were brazenly flouted in the grant
of approval
and hence this was not in the public interest. Therefore, these
illegal
approvals attract Section l3(lxdxiii) of the Prevention of
Corruption,Act
(1988)' The present Governor of RBI is thus answerabte
in a probe into this
matter.
to
RBf
'
the said approval to 10 applicants (most of them were MFI). More than half
of the successful applicants were lacking the eligibility criteria as set out in
the guidelines.
Looking into the credentials of successful applicants, it is apparent that
most of these applicant's foreign holding are contrary to the criteria as set
out by RBI for Small Finance Banks. Most of successful applicants are in fact
controlled by foreign entities.
It
10
Further P. 16(1) creates a provision for the RBI to lay down additional
criteria in relevance to the prescribed 'fit and proper' criteria, which gives an
opportunity to corrupt persons to play with words and create a way for the
beneficia ry companies.
of
t,t/hB.xW
Yours sincerely,
( SUBRAMAN|AN SWAMY )