According to RBI, payment banks can apply to convert into small finance banks if they are eligible under the guidelines after five years of operation.
New Delhi: The Reserve Bank of India (RBI) on Monday increased the minimum capital requirement for Small Finance Bank to Rs 200 crore. Along with this, payment banks have been given permission to work as SFBs. Interestingly, the total assets of all the small finance banks operating at present are more than Rs 200 crore.
Rs 100 crore capital needed to shift to SFB
Issuing revised guidelines, the Reserve Bank said primary (urban) co-operative banks (UCBs) wishing to voluntarily migrate to SFBs will be required to have capital of Rs 100 crore, which should be increased to Rs 200 crore within five years from the date of commencement of business. It will have to be Rs.
Payment Bank will be able to convert into SFB after 5 years of operation.
According to this, payment banks can apply to convert into Small Finance Banks (SFBs) after five years of operation if they are eligible under the guidelines. According to the notification, ‘Upon commencement of operations, Small Finance Bank will immediately be given the status of Scheduled Bank. Banks will be given general permission to open ‘banking outlets’ from the date of commencement of operations.
Fino Payments Bank applies for SFB license
Meanwhile, Fino Payments Bank said in a statement that it has already applied for SFB license in line with the regulatory guidelines on converting into SFB. The regulator is examining this application and further comments are awaited from RBI as per procedure.
Earlier on November 27, 2014, the Reserve Bank had issued guidelines for licensing of small finance banks in the private sector.
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