The Reserve Bank has raised the minimum capital requirement for Small Finance Banks (SFBs) to Rs 200 crore and permitted payments bank to upgrade as SFBs.
Issuing the revised guidelines, RBI said that for primary Urban Co-operative Banks (UCBs) desirous of voluntarily transiting into SFBs, the initial requirement of net worth would 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.
As per the guidelines, payments banks can apply for conversion into SFB after five years of operations if they are otherwise eligible.
Further, according to the notification, SFBs will be given scheduled bank status immediately upon commencement of operations. The banks will have general permission to open banking outlets from the date of commencement of operations.
RBI had last issued the guidelines for licensing of SFBs in the private sector on 27th November, 2014.
