With its effort for furthering financial inclusion in the country, the Reserve Bank of India (RBI) has released the final guidelines for ‘on-tap’ licensing of small finance banks (SFBs) in the private sector and opened the window for applicants to approach the regulator at any point of time for ‘on-tap’ licensing of SFBs.
The minimum paid-up voting equity capital or net worth requirement has been set at Rs 200 crore, up from Rs 100 crore as set earlier. For primary urban cooperative banks that intend to convert into SFB, the initial requirement of net worth shall be at Rs 100 crore, which will have to be increased to Rs 200 crore within five years from the date of commencement of business.
Beside, Payments Banks can also apply for conversion into SFB after five years of operations, if they are otherwise eligible as per these guidelines. The RBI also noted that SFBs will be given scheduled bank status immediately upon commencement of operations and they will have general permission to open banking outlets from the date of commencement of operations.