The Reserve Bank of India announced the setting up of a standing external advisory committee (SEAC) to evaluate applications for universal banks and small finance banks. The five-member committee will be headed by former deputy governor Shyamala Gopinath. The SEAC will have a tenure of three years and will screen applications for universal and small finance banks after the regulator first vets the proposal. The SEAC will also include four other members, Revathy Iyer, Director on the RBI central board, B Mahapatra, former executive director, RBI and presently chairman of NPCI, T N Manoharan, former chairman of Canara Bank and Hemant Contractor, former MD of State Bank of India.

Under the chairmanship of Shyamala Gopinath, the Reserve Bank of India (RBI) announced the setting up of a Standing External Advisory Committee (SEAC) to evaluate applications for universal banks and small finance banks. Let's understand the details of this announcement:

Explanation:
1. Formation of the Standing External Advisory Committee (SEAC): The RBI, under the chairmanship of Shyamala Gopinath, has formed an external advisory committee called the SEAC. This committee will be responsible for evaluating applications received for the establishment of universal banks and small finance banks.

2. Purpose of the SEAC: The SEAC has been established to provide an external perspective and expert guidance on matters related to the licensing of banks. It will evaluate the applications received by the RBI and provide recommendations based on their assessment.

3. Evaluation of Applications: The SEAC will evaluate the applications received for the establishment of universal banks and small finance banks. It will assess various factors such as the financial soundness of the applicants, their governance structure, the experience and track record of the promoters, and their proposed business plans.

4. Enhancing Transparency and Accountability: The formation of the SEAC aims to enhance transparency and accountability in the process of granting licenses to banks. The committee will bring in external expertise and perspectives, ensuring a comprehensive evaluation of the applications received.

5. Expertise of Shyamala Gopinath: Shyamala Gopinath, who is the chairperson of the SEAC, is a well-respected economist and former Deputy Governor of the RBI. Her extensive experience in the banking sector makes her a suitable candidate to lead the committee and provide valuable insights in the evaluation process.

6. Promoting Financial Inclusion: The establishment of small finance banks is an important step towards promoting financial inclusion in the country. These banks cater to the banking needs of unbanked and underbanked segments of the population, including small businesses, low-income households, and marginalized communities.

In conclusion, under the chairmanship of Shyamala Gopinath, the RBI has announced the formation of the Standing External Advisory Committee (SEAC) to evaluate applications for universal banks and small finance banks. This committee, led by an experienced economist and former Deputy Governor of the RBI, aims to enhance transparency, accountability, and expertise in the licensing process, ultimately promoting financial inclusion in the country.