Reserve Bank of India (RBI), before offering licence for small and payment banks has asked the I-T department to get a ‘tax angle’ verification done for corporate entities seeking licence to operate small finance and payment banks in the country. The inputs sought relate to financial and tax history of close to four dozen entities, their owners and senior executives who have applied for getting RBI's licence.
RBI Governor Raghuram Rajan had recently written to the Central Board of Direct Taxes (CBDT), the apex policy making body of the Income Tax department, to expedite the matter and provide the banking regulator with inputs about individuals at the helm of these entities with businesses spread across the country and abroad. CBDT on its part has asked its investigation and regular assessment ranges across the country to “quickly” collect the data and submit them so that RBI can take a final view on the grant of licences to eligible parties. In case there is no adverse finding, the I-T department will send an all okay report. On the same time any adverse record or observation about financial dealings of these entities, found out either by way of an earlier action by the taxman or through regular mechanism of intelligence and data gathering, should be reported.
The objective of licencing small banks is to promote financial inclusion by offering saving vehicles and credit to small business units and other unorganised sector entities. The RBI had received 72 applications for small finance bank licences and 41 applications for payment bank licences and governor Rajan had earlier said that RBI would be able to announce new sets of bank licences, or at least one set of them, by the end of August.